Term Life Insurance or Whole Life Insurance?

A common debate among advisers seems to center around the incredible difference in opinion of whether term life insurance or whole life insurance makes the most sense for clients. Please understand that each of these plans are completely different animals serving separate needs.

Below is a snapshot of benefits for each:

Term Life Insurance

-Offers the ability to buy a large amount of death benefit at a low cost

-Tax free death benefit proceeds are paid out to beneficiaries

-Level premiums (Premiums don’t rise) and Level Death Benefit (Face Amount doesn’t go down) for the entire length of the term (regardless of health changes)

Whole Life Insurance

-Versatile policies that cost more than term life insurance policies, but can be viewed as a type of ‘forced savings account’ that builds cash value and provides life insurance coverage for your ‘whole life’

-Provide Death Benefits that are paid out tax free, as well as ‘Living Benefits’ due to the cash value build up. Cash values can be used to supplement retirement income, pay for college expenses, or long term care type expenses etc.

-Retirement income can be pulled out tax free (when set up properly), providing tax relief in our later years when our tax burden is typically heaviest

When considering life insurance of any kind, it’s important to speak to an agency that cares about your individual needs. There are life insurance plans for all types of situations and we are fortunate to have access to as many as 80 insurance companies to ensure a proper solution.