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When making a decision between whole life and term life, many people get caught up in comparatives and trying to conclude which one is better. In reality, neither is superior over the other, and each has pros and cons. They do have important differences, however, that you need to consider so that you can make the right decision for your personal financial needs. The bottom line is that your reasons for why you want and need Edinburg life insurance should drive your decision.

Term life is initially less expensive, but it will lapse or expire at a certain age, usually somewhere between 75 and 85. If you die during the period of the coverage, term insurance will pay a death benefit, including things like paying off your debts and funeral expenses, but if you live beyond the period of coverage, your beneficiaries will receive no payout. Term premiums will also increase at predetermined intervals, for example, every 10 years, and you have the option of renewing or ending coverage. This is based on the idea that most people are in good health until age 50, then the term periods begin to increase progressively. The rate differs from company to company, but most companies will not sell term life to people beyond age 65. Term insurance is a good way to manage short-term needs.

Whole life, on the other hand, is a more permanent insurance that spreads the cost over the life of the policy. As long as you pay the premiums, it stays in effect until death, regardless of age. It combines term insurance with an investment piece, which can involve a range of investments, such as stocks and bonds. Your premium includes the cost of the term, but also builds up a cash reserve in the investment portion. It includes three subcategories: whole life, term to 100, and universal life. The investment portion of the life insurance plan can be withdrawn by the policyholder, or used as collateral. Depending on the terms, a whole life plan can contribute to equity growth.

Whole life insurance is initially more expensive, but does not increase the same way as a term life insurance policy does. If purchased at the age of 40, for example, the whole life plan would cost more, but eventually the term life premiums would increase beyond the whole life payments.

How do you know which type is right for you? Depends on your individual circumstances. If you have a young family and many expenses: mortgage, child care, etc. cheaper now may make sense. If you are more interested in a long-term financial plan for your family, whole life may be a better choice. If you are facing estate or death taxes, the trade-off of higher premiums now may be preferable. Many factors need to be considered. There are other life insurance options, and it is also possible to combine your life insurance types.

An insurance professional can play an important role in helping you decide which type of life insurance is best for you and your family. Contact Raymond Longoria Insurance today at 888-296-0345 and let us help you explore the options.

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Raymond Longoria Insurance
2025 N Conway Ave
Mission, TX 78572
Phone: (956) 581-1034
Toll-Free: (888) 296-0345