Dumas, Texas
200 E First St.
Dumas, TX 79029
(806) 935-6888

What Are the Differences Between Whole & Term Life Insurance? August 24, 2020

Dumas, Moore
What Are the Differences Between Whole & Term Life Insurance?, Dumas, Texas

A life insurance policy should provide all the financial support that your family needs after you pass away. As you shop for the right coverage, the first decision you will make at an insurance agency is choosing between a term or whole life policy. Below is more information to help you understand the differences between the two so that you can make the right choice.

Term Life Insurance

This is a simple and affordable option. Each policy is for an outlined “term,” which can range from 10, 20, or 30 years. The longer the term, the more affordable the premium will be. Typically, people will choose a term that covers a period in which they are responsible for their family’s financial needs and will replace their income. For example, some parents want to have coverage until their kids graduate from college.

insurance agencyThis policy typically does not require a medical exam. While you may have the option to renew at the end of the term, your rates will likely go up since you are older than when you previously acquired the policy. Otherwise, when the term is over, the policy will expire. 

Whole Life Insurance

As the name suggests, this policy provides coverage for your entire life as long as you keep paying the premiums. This option has a higher monthly cost, but it provides more financial protection. A portion of the premium goes into a non-taxable, cash-value account, which is available for you to borrow from or cash out during your lifetime. This withdrawal is tax-free as long as you remain within the government guidelines for paying your premiums. In this way, it can serve as a secondary retirement savings account.

If you are young when you acquire this policy, you can lock in a low rate with your insurance agency that they cannot change if you make your payments regularly. However, this policy typically requires a medical exam to check for preexisting conditions.


The knowledgeable team at Stidham Insurance Agency will explain all of your options to you and create a customized solution for your needs in Dumas, TX, and the surrounding area. For more than 45 years, this insurance agency has been providing comprehensive and high-quality products. Learn more about their insurance services on the website. Call (806) 935-6888 to request a free consultation with an insurance agent.

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