Life insurance is a smart investment for adults of any age. The policyholder makes regular premium payments; then, upon their death, their beneficiaries receive a cash disbursement that can be used for funeral expenses, estate-related costs, personal bills, or other payments. There are two types available—whole and term life; learn more about each one below.

Whole

Whole life insurance provides lifelong coverage for the policyholder. In addition to the death benefit of a cash payout upon the policyholder's passing, this insurance also accumulates cash value.

This value grows throughout the duration of the policy. You can borrow against the money you've accrued during your lifetime. This amount often needs to be repaid with interest or the death benefit that is ultimately paid out will be significantly reduced.

Alternatively, you can withdraw a portion of the money or surrender the policy altogether and "cash it in" for its accumulated value.

To qualify, you typically need to pass a medical exam, but it may be possible to bypass this requirement by paying a higher premium cost.

Term

Term life insurance is a more straightforward option. It only offers coverage for a specific amount of time that you choose—usually, this is for 10, 20, or 30 years—and can be renewed upon expiration. If you die during the term of the policy, your beneficiaries receive a death benefit. The amount is equivalent to the amount of coverage you purchased when you enrolled in the policy.

Most term life plans do not require a medical exam as a prerequisite. You often have the option of converting a term life policy to a whole life one if your preferences change.

Understanding the differences between these two types of life insurance will ensure you find the best policy for your budget and goals. Christina Mendoza & Associates LLC Insurance and Financial Services is here to help. Since 2004, they have been serving Bexar County, TX, and the surrounding areas. They offer life and health insurance plans, as well as Medicare guidance and financial and retirement planning. Call (210) 389-5289 to schedule an appointment or to request a quote. Visit the website for more on their offerings.