If you’re not clear on the precise difference between term and whole life insurance, you have come to the right guide on insurance. I promise: by the end of this short article you will be clear.

There a few major differences, so let’s take them one at a time. Term life is insurance that you buy for a limited, defined term. This term could be as little as a year, but it’s usually between 10 and 30 years. Whole life, on the other hand is good for the whole of your life, i.e. until you pass away, or until you reach a very old age as specified in your policy, say 90 or 100 years old. So, the #1 difference between term life insurance and whole life insurance is whether there is a fixed length or term of the policy, or there is not.

The implied rule here is that you know for certain that with a whole life policy you will receive a death benefit payout, as long as you make your premium payments, unless you yourself decide to terminate the policy early, for some reason. With term life you know for sure that you will not get a payout unless you die within the term of the policy. It’s very simple, and note that it’s hardly a question of whether one type or another is ‘good life insurance’: the best policy is the one that make the most sense for you.

The next difference between whole life and term insurance? Let’s look at their investment function, or lack thereof. Term policies have no investment value. You cannot borrow against them and the payout amount is fixed from the start. With whole life, as well as other forms of permanent insurance, you can borrow against the cash value amount that has built up, at an interest rate that is probably going to be lower than credit cards and other loan sources. Now, most unbiased insurance experts at least (i.e. experts not actually engaged in trying to sell you whole life insurance!) will tell you that while whole life might be good life insurance in a generic sense it is not a great investment, but that is the subject of another post.

We just touched on the basis for a big difference between term life and whole life insurance, that of the concept of ‘cash value’. This amount builds up over time, based on interest earned by the premiums that you pay. The idea is that the cash value amount will cover the guaranteed payout that the insurance company is obliged to pay when you die. You may borrow against this amount, but be careful that you don’t overdo it as you may impact the eventual policy payout, which is the reason for buying life insurance in the first place! Also, since borrowing against the cash value is a little like paying the insurance company to borrow from yourself don’t put too much weight on this feature as a reason to buy whole life insurance. Oh yeah: term life does not have this cash value feature. Your death benefit, should your beneficiaries get it, is all that you are owed.

Here’s a big one– the premium amounts that you pay, for a similar payout amount. As any term life insurance guide will tell you, the difference is huge. Whole life premiums are multiples of what term premiums are for the same coverage amounts. Now, although anyone would be attracted to the idea that his heirs will definitely get a payout upon his death, the high cost of whole life premiums is enough to make a smart a smart buyer think twice, and this leads us to the final, essential point:

Most people don’t buy whole life insurance. They buy term. Good life insurance for them primarily means lower payments and a clearly defined policy.

OK, whole life wouldn’t exist as a product unless it was a good idea for some. But rather than paying the sky-high whole life premiums, most folks opt for a term policy (maybe with an option to renew after the initial term finishes) and try to diligently invest money that they might have paid toward a whole life policy. In this way they will very probably have a larger nest egg when they pass away than the promised whole life payout that their sizable premiums are going toward each month. This is the most critical difference between term life insurance and whole life, and while it’s always best to get a second and third opinion on life insurance basics as you augment your knowledge with a good whole and term life insurance guide, it’s why you’ll most likely end up buying term life.

In a debate of term life insurance vs. whole life insurance it would be unfair to call any better than the other because both of them have their objectives, which they serve perfectly.

Term life insurance provides death benefits and usually ranges from 10 to 30 years. If you live past the term, you get no money back. Term life insurance is generally cheaper than whole life insurance. Whole life insurance builds a savings account along with the risk coverage it offers. Therefore, the benefits are available as long as the premiums are paid. If you do not die, then you can cash in on the policy or borrow against it. However, the premiums are definitely higher.

There is a big debate over term life insurance versus whole life insurance most of the time. A major difference between whole vs. term life insurance is that the premiums for terms life stay the same while premiums for whole life insurance might vary over the life of the policy.

Generally younger people are advised to invest in term life insurance because it is cheaper while the difference between its premium and whole life insurance premium can be invested elsewhere. The younger population is not going to reap benefit of the whole life insurance in near future, say 20 to 30 years. However, when the term life insurance expires, its owner grows in age and deteriorates in health, thus making it even costlier to buy a life insurance again.

A combination of whole term life insurance policies could be the answer. Consult first with an insurance professional, and ask his opinion of getting a small whole life insurance policy along with a term life insurance policy. Life insurance by its very nature is not a simple product because its premiums, interests, depends on a lot of uncertain factors like market, your health, age, insurance company and much more. Thus you have to decide for yourself from the two by assessing your future needs, risks involved and present financial position.

Whole life insurance is a form of permanent life insurance, which means that it has a cash value amount that builds up over time based on the premiums that you pay over the years, and in the case of whole life, the interest that accrues on those premiums. Whole life is the simplest form of permanent insurance in that you may borrow against the policy, but you have very little additional flexibility in terms of where you can invest the policy’s cash value amount. As long as you make your premium payments each month, your loved ones, or beneficiaries, will receive a payout when you pass away.

The first thing to decide is what kind of permanent life insurance would suit your needs the best, or if in fact a term policy would be most appropriate. Assuming you have settled on whole life, there is a critical question to consider before you buy insurance based on instant whole life insurance quotes. And that is: what are you forfeiting when you act on an “instant” quote?

Insurance companies aggressively advertise instant quote life insurance because they know the people who are in less than optimal health need a way to get life insurance without getting a medical examination. They know how attractive the prospect is even to people who may be in good health, but simply not sure what a doctor’s checkup might reveal about their overall condition. As low as an instant whole life insurance quote may appear to be, you can be sure that either there is padding built into the premium price or the payout is lower than it would be otherwise, based on the increased risk that the insurance company has to take to insure people without knowing about possible health issues.

How to get around these increased premiums or lower payout? Take a deep breath and buy life insurance that requires a medical exam. Not only will the premiums be lower for similar amounts of coverage, you might surprise yourself by being in better health than you thought. Even if you’re not in perfect health, you might still get a better deal by submitting to the medical exam.

Few people would argue the point that life insurance is a necessity, to protect the financial well-being of those you love should you pass away during your prime earning years. The question is, what is the best life insurance to purchase? Let’s take a quick look at the relative merits of the two most popular forms of life coverage: term life insurance vs. whole life insurance.

As the name indicates, term life insurance is insurance that you take out for a fixed term. So this policy is taken out for a certain number of years, and the policy expires at the end of that period. If the policyholder dies during this time, the beneficiary who has been named by the insured will receive the death benefit payout associated with the policy. If the policy holder is alive at the end of the term nothing is paid out.

You should know that statistically speaking, it is likely that the person who takes out the policy will survive through the length of its term. This is why term insurance is almost always the cheapest insurance you can buy for a given payout amount: the unlikelihood of payout enables insurance companies to offer term life to you relatively inexpensively. Before we look at term vs whole life insurance, let’s look at the whole life policies.

Whole life insurance, aka whole of life insurance, came into being because the market demanded life insurance with a guaranteed payout, regardless of when the policyholder died. In addition to the assurance of a payout, insurance agents often tout its benefits as an account against which you may borrow money, and as a sort of retirement account. With whole life, the concept of “cash value” was introduced, which is the value that the policy has over and above the premium payments you’ve made, because of interest that accrues on those payments over the life of the policy. The idea is that the cash value amount will eventually cover the payout when the insured person dies. In the meantime you are essentially allowed access to it if you desire, by borrowing from it. Be aware that borrowing against your cash value could reduce the payout to your beneficiaries if you should pass away before paying back the loan.

So moving on to the question of term life versus whole life insurance. Conceptually, whole life may sound like a pretty good deal. You get additional features and a guaranteed payout. The fact is though, that unfortunately you will pay a small fraction of the premiums each year with term life insurance vs whole life, for a similar amount of coverage. The premiums are large enough that they could affect your standard of living. Even if you can afford them though, the reality is that for most people whole life insurance policies just don’t make good financial sense anyway. There are usually fees and hidden costs that really increase your premium relative to the amount of coverage you are receiving. Everyone has alternatives as to where to put their money, and when it comes to the question of term insurance vs. whole life most experts will counsel you to use an alternative to whole life to address your income needs in retirement.

Specifically, many suggest to buy a good term life policy, possibly with a rider (an extra provision) to either extend the original policy when it is finished or to convert it to a whole life policy at that time. Then, since the term policy should lock in years of relatively low premium payments for you, get as aggressive as you can with your retirement planning and investing. What will then hopefully happen is that the next egg that you build over decades will exceed, and possibly greatly exceed, the whole life payout for which you would have paid so much.
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It’s no secret that it becomes harder and more expensive to get life insurance as you get older. Life insurance companies prefer to cater to younger people who have a good chance of outliving their term life policies or paying into whole life policies for several decades. But this isn’t to say you have no options if you would like to use an insurance policy to take care of your final expenses while you are still alive, or leave a payout of some amount to your heirs when you pass away. There are a few things to keep in mind if you are shopping for the best life insurance for elderly people.

If you look at term life insurance for the elderly, just remember that if you do not die within the term of the policy that the insurance company is not obligated to pay anything out to your loved ones. Now, it is possible to get term insurance with an option to renew it after the policy term finishes. Naturally you will pay a higher premium (all else being equal), but weigh that against the benefit of knowing that an eventual payout is more likely. Another thing of which you want to be aware is whether the policy is level term or not: do premium payments remain the same over the life of the policy -level term- or do they increase?

Term life insurance for elderly people is often the way to go, relative to whole life, for other reasons. Will you be able to make the higher premiums in the years when your earning power will probably be declining? Also, and this is a big shortcoming, whole policies sold to people over 50 or so often have no cash value to borrow against, or to take if you would like to terminate your policy early.

It’s a major selling point of whole life when you are younger, even though the premiums are higher: these policies behave a little like investments. Even though most experts actually advise against whole life because of the hidden fees and lack of real flexibility (as one has with variable or universal life insurance for example), their investment aspect still makes them attractive to some people. Take that away, and the payout relative to what you will pay into the policy makes whole life an even less attractive option for most older people.

A final word: it’s very easy to find ‘guaranteed acceptance’ policies for the elderly online, and in direct mailings. The idea of needing no medical exam to get insurance that can at least pay for your final expenses is naturally attractive to older people, but buyer beware. The amount you pay into these policies may very well exceed the death benefit payout that your heirs receive. If you are reasonably healthy, it might be wise to find a renewable lower-premium term policy that does require a medical exam. Consult a knowledgeable agent that you trust to help you find what is best for you.

Two main types of life insurance exist: whole life insurance and term life insurance. Term life insurance provides coverage for a specified number of years. This type of insurance plan does not develop a cash value. The whole life insurance definition on the other hand, provides an individual with coverage for either their whole life or until they reach the age of 100. Whole life insurance plans develop a guaranteed cash value.

This usually begins following the first year of the plan. With whole life plans, you are required to pay a fixed insurance premium for the rest of your life and are not required to meet the costs of the increasing insurance premiums as found on term life policies. In order to remain in possession of the insurance, it is vital to keep up with full premium payments.

The obvious advantages of whole life insurance are the fixed premiums and the guaranteed cash values.  Aside from insurance protection for life, whole life insurance also features an investment element in which you can accumulate cash value on a tax-deferred basis. The individual named on the policy can cancel or surrender the insurance policy whenever they wish and they will receive the cash value.

Some types of whole life insurance plans generate cash values that are larger than the guaranteed amount. However, this is dependent upon the interest rates and market performance. Furthermore, you hold the right to have a loan of your whole life insurance policy’s cash value. One of the advantages of whole life insurance is the opportunity to be able to earn dividends. Furthermore, the interest accrued on a whole life insurance policy is adjusted on an annual basis.

Like many insurance products, there are many different whole life insurance policy options. It is important to budget for whole life insurance premiums in the long term and refrain from purchasing whole life insurance if you will be unable to afford it.

Most everyone needs a life insurance policy at some point or another, especially those with young families. It doesn’t matter who you are, at some point the need will arise for one, and when it does, you will need to decide what type of life insurance policy you want to have.

You do have your pick of them, but the ones that most people end up choosing between is a term life policy or a  permanent insurance policy, also known as whole life insurance. Both types have their own merits, and term life insurance is definitely cheaper, however the downfall with term insurance is that it expires at the end of the term. Permanent insurance, is permanent- for your whole life and offers a guaranteed pay out to your beneficiaries upon your death.

This type of protection is very important for your family and once you have the plan set up in place, you never have to worry about it again- you just pay your premiums and maintain that peace of mind knowing your family will be protected.

If you go with a term life insurance policy you will find that you pay a lower price, but the contract will expire after a number of years. You can typically choose the number of years you will have, but if you do not die during those years, your family will not receive any benefits. In addition to that, it feels like you are putting a time limit on your life, which is something that no one wants to do. Term insurance can be great if you are on a budget and just need to have coverage until your kids are grown, or out of college, the mortgage is paid, and or your partner can financially make the bills.

A permanent insurance policy is better for lasting peace of mind. You will know for sure that there will be money for the funeral, to pay bills, to pay the mortgage, and for your loved ones to continue on with their lives while they will be grieving and unable to care financially for things otherwise. It is more expensive, but it will stay in effect your your entire life. As long as you pay the monthly premium, you can be sure that there will be a payout eventually. Note that this will cost more than a term life insurance plan, but with it your family will be set for life. If you have the income, we recommend you try this plan.

Going through quotes for life insurance online, it will be clear to you in minutes that whole life insurance is not the cheapest option. Term insurance has it beaten easily in the price department. You owe it to yourself though, before you dismiss whole life, to take a little time to educate yourself about the differences not only between term and whole life, but between a term policy and all the forms of permanent life insurance. You won’t make the best decision regarding your life insurance needs from one instant whole life insurance quote, because price should only be one of your criteria. If educating yourself about life insurance sounds like a lot of work, fear not: with a good, free guide to the basics of life insurance, you’ll be able to drill down and have a general idea about what makes sense for you and your family in just a few hours.

First of all, you want to have the difference between permanent and term life insurance clear in your mind. Permanent policies have a guaranteed payout, payable either to your beneficiaries when you pass away or to you when you reach a very advanced age, usually 100. They have a so-called cash value amount that normally increases through the life of the policy, that is meant to cover the death benefit payout when you pass away. Now a whole life policy is the simplest form of permanent life insurance: the premiums usually stay the same over the duration of the policy, and the cash value builds based on accruing interest. Other forms of permanent insurance like universal life, variable life, and variable universal life, allow for much greater flexibility in what you are allowed to do with the cash value. With them you a free to put the money into different investments, and/or you may vary the amount of coverage that you need with the policy as your needs change. Be aware of all this when you arrive at the lowest whole life insurance online quote: again, you need to look at a lot more than just price!

With term life, you simply pay a fixed monthly premium over a length of time specified in your policy, usually between 10-30 years. In return, if you pass away during this period, your heirs receive the death benefit payout. However, if you do not pass away during the policy’s term, and this is the key, nothing is paid out. Statistically you are likely to outlive the policy, and this is exactly the reason that term rate quotes are so breathtakingly low. (You can purchase a clause included in the the term policy that allows for a ‘return of premium’ at the end of the life of the policy, but this will increase the premiums, as you would expect.)

So whole life is more expensive than term, and allows me less flexibility than the other forms of permanent insurance– why would I buy it? Well some people prefer the straightforward nature of the policy, the idea that ‘forced savings’ will leave them better off when they retire, as it is usually possible to borrow against the cash value amount. Also, they will not be left without life insurance at the end of some arbitrary term, and be much more expensive to insure at that time. There are benefits in whole life for some people after all; if there weren’t these policies would no longer exist.

In the end though, for most people, experts advise to get a good term policy and diligently put money into investments geared for the long term. In this way, you don’t pay the often substantial fees that an insurance company will charge you just for maintaining your whole life policy. Basically the investment aspect of whole life policies is rarely worth the higher cost of the premiums, and although you won’t have a defined death benefit payout with a term policy, you will very probably have more than that amount by the end of the policy, if you do save and invest responsibly. Can you see now why there is much more to this picture than a just pulling up a free whole life insurance quote?

There are quite a few good whole life insurance companies from which to choose these days. The recent turbulence in financial markets has revealed that a few were on shaky ground, but as the real rough weather seems to abated, we can have more faith in the companies that are left standing. When it comes to shopping around, be prepared to spend a little time learning do not rush into purchasing a policy. Life insurance is such a long term investment that it’s really worth your time. Here are just a few of the top rated whole life insurance companies:

In addition to standard whole life policies, New York Life offers so-called custom whole life, which has additional features you can purchase, such as accidental death benefits and a waiver of premium in case you should become disabled. Also, modified premium whole life insurance is available, which lets you get a larger policy than you might otherwise be able to afford because the premiums for the first five years are reduced.

State Farm is another insurance company that has been around for a long time. Their whole life offerings include the possibility of shorter premium payment periods, dividends, and the ability to borrow against any accumulated cash value.

Mass Mutual has been around for over 150 years, and might be an attractive option for you since they are not a publicly traded company. Without pressure to please shareholders, the idea is that they put more focus on their customers.

Another way to find the best company and policy for you is to ask people close to you who are financially savvy. Your family, friends and colleagues often know a lot more than you think about life insurance, because most people tend to never talk about it! Remember to get as much feedback as possible. The key here is extensive shopping, and in addition to personal recommendations, looking online for insurance information and rate quotes from top whole life insurance companies is another huge resource. Agood online guide will answer most of your questions about life insurance, at least.

The question of which whole life insurance company to go with can’t really be answered in one article. Take your time and remember that you’ll be paying premiums for decades most likely, so time spent investigating is well worth it. Because of the complexity of the policy, and any customization features you might want to include in your package, you need an agent who will answer all your questions and not push you too hard: in fact, you deserve it.

Remember too not to rush over the most basic of life insurance decisions: whether to go with term life or permanent insurance. The fact remains that for most people, term life insurance is still the best way to go.

If you look at insurance policies for a given amount of coverage, term life insurance is clearly the cheapest: no more than a fast online search is required to drive this point home. However, when you really take the time to consider the pros and cons of term vs permanent policies like whole life, then you will find that they all have strong points. After all, would there even be such a thing as whole life insurance if it wasn’t right for some people? The intricacies might not be that clear when you simply go through whole life insurance quotes online.

But take time to study all life insurance plans, and you just might find WL the more attractive option, depending on your own situation. You really should examine all your options anyway, to make an informed decision.

With whole life insurance, you are covered for your entire life. Unlike term insurance, with WL, for as long as you are alive, your policy covers you, so this there is a reassurance for some people in this. The monthly premium cost of the policy to you is higher, often multiples of term coverage, but it’s the price you pay for a guaranteed payout. Any instant whole life insurance quotes you get might immediately put you off this kind of policy, but what are some benefits of it? Well, payments are the same through the life of the policy, so they are more predictable than other forms of permanent life insurance like variable life or universal life. Whole life is actually safer than they are, assuming you can make the premium payments, as there is some financial risk transferred to the policy holder with VL or UL. Keep this in mind when you are surfing the web, running through instant whole life insurance quotes!

Having said all this, most experts advise against whole life insurance, mainly because the premiums are so high. If you buy term life insurance and wisely invest even a part of the difference between what the term policy costs and what similar whole life costs, the chances are pretty good that by the end of the term policy you’ll have a larger nest egg than the death benefit payout that you paid so much to secure with whole life.

To make the right decision you will probably require more than a whole life insurance online quote. Questions that you’ll certainly have may be best answered sometimes by a real agent from a company like TIAA Cref, for instance. Their agents are salaried, so you can get a whole life insurance rate quote without fear of being brow beaten by a high pressure agent. Browse through as many policies as you need, so that you can make a very informed decision in the end.