When it comes to protecting your loved ones financially, life insurance is a smart investment. Yet choosing the right policy for your family’s needs can prove challenging. Here, learn what term and whole life insurance policies offer to get a better idea of what you want.

What Is a Whole Life Policy?

Whole policies are permanent and protect the holder throughout their entire lives. Beneficiaries receive payouts upon the holder’s passing to help them remain financially stable. Monthly premiums get deposited into tax-free, cash-value accounts. This allows the holder to borrow against the policy if they need to. As long as the holder adheres to premium payment guidelines, they can withdraw some or all of the amount without paying taxes.

Whole life insurance policy premiums never change, and the cash value accumulation rate is guaranteed. The death benefit is also guaranteed; however, if the holder fails to pay back the money borrowed against the policy with interest, coverage ends.

What Is a Term Life Policy?

Also known as pure life insurance, term policies provide coverage for set periods only. A term policy protects the holder’s beneficiaries in the event of the individual’s premature passing but otherwise does not have value. The holder pays the premium on a monthly or yearly basis and chooses how long the policy will remain active, such as for 10, 20, or 30 years. As with whole policies, term versions include death benefits that remain the same for the policy’s duration.

Term policy timelines typically coincide with the age of the holder’s family members. For example, if the holder pays into a term policy for 20 or 30 years starting when their children are young, it ends when said children become financially independent adults. Term policies also come with age restrictions. They offer relative affordability for younger persons; however, those 80 and above are not candidates for term policies.

If you need assistance deciding between term and whole life insurance, contact Truax Insurance in Ogdensburg, NY. The agency offers life, auto, home, business, liability, and health insurance options from top brands, including Progressive®, NYCM Insurance®, and Livingston Mutual Insurance Company. Call (315) 393-3805 for a quote or visit the agency online for more information. Get additional tips on Facebook.