Life insurance allows you to protect your loved ones, providing for them financially in the event of your passing. Your family can use these proceeds to cover anything from mortgage payments to the costs for end-of-life services. When shopping for life insurance, there are two types you will hear about—term and whole life insurance. Discover the difference below.

What Is Term Life Insurance?

Term life insurance doesn't span your entire life but is limited to include only a set amount of time, usually anywhere from 10 to 30 years. There is no “death benefit guarantee” because your beneficiaries only get an insurance payout if you pass away within that set time period.

When buying term life insurance, select a term that covers the years you'll be responsible for the household bills. The logic is that by the time your policy expires, there will no longer be any need for it. Small children will be adults, for example, and you'll have paid off the mortgage.

What Is Whole Insurance?

Whole life insurance covers you for the duration of your lifetime, assuming you don't default on paying your premiums. The premiums are fixed over time, never going up regardless of changes in the market.

Whole life insurance has a cash value. You may be permitted to borrow funds from your life insurance or borrow against it. Various insurers have different guidelines in place to prevent you from accidentally decreasing the policy's benefit.

Which Option Is Best?

Whole life insurance is more popular. It lasts longer and provides a death benefit guarantee, meaning your loved ones definitely get a payout upon your passing. It also has the cash value component. That said, term insurance is cheaper and might be convenient if your obligations like kids and mortgages are minimal. The right option depends on your unique needs.

For guidance on the best life insurance option for you, trust Bruce Richardson - State Farm Agent. Located in Mooresville, IN, Bruce serves clients throughout the Central Indiana area. He has over 33 years of experience with State Farm®, covering everything from car insurance to home insurance. Client satisfaction is his top priority, and he will work with you to find the product that best fits your needs. Learn more about his experience online and call (317) 831-3500 to schedule a meeting.