Getting a life insurance policy from an insurance agency can protect you and your family from financial trouble in case of unfortunate events, such as sickness or accidents. After deciding to purchase one, you’ll need to determine if you want a whole or term life insurance policy. If you're unfamiliar with these types of coverage, use this quick guide to help you decide.
What Is Whole Life Insurance?
As a policyholder, whole life insurance covers you for the duration of your lifetime. The initial premium costs may be higher than term insurance, but it also comes with more benefits.
This type of insurance comes with an investment option, known as a cash-value account. Your monthly payments are put into an account that you can borrow against or withdraw cash from. This type of insurance lets policyholders spend their savings prior to their death. However, you’ll still have peace of mind knowing there’s money left for funeral costs or to support family members after your unexpected passing.
What Is Term Life Insurance?
Term life insurance only offers coverage within a particular time frame, and the insurance agency will distribute the payout to your beneficiaries if you die within that coverage period. Unlike whole life insurance, term insurance doesn't have an investment component. This makes it a more affordable option.
Most people who purchase term insurance do so for the years they will be raising children, paying for their education, or paying a mortgage. These funds will continue to be covered in the event of your death. Ideally, the coverage period will end when the children are independent, the house has been paid off, or you have enough savings for retirement.
If you're still unsure which policy would best suit your situation, talk to the reputable agents at Reed Brothers Insurance in Lexington, KY. This insurance agency has been assisting clients since 1912, and their passion is backed up by over a century of experience with life insurance, health insurance, property insurance, and other related services. Call (859) 253-2728 or visit their website to learn more about their offerings.