Understanding the two main types of life insurance can help you make the right decision for yourself and your beneficiaries. Keep reading to learn about term versus whole life insurance. Remember to discuss any questions on your individual coverage with your agent from Rob Hill Insurance Group in Atlanta, GA.
About Term Life Insurance
Term life insurance lasts for a specified period, during which you pay premiums. If you die within that timeframe, your beneficiaries get the death benefit. It’s simple and easy to understand.
Term life policies end after a set number of years, giving you time to build wealth and for your dependents to grow up and finish college. The assumption is that you won’t need such a big safety net later in life. On the downside, term life has limited coverage. If you still need coverage past your 60s, you may need to purchase a new policy.
In general, term life is less expensive than whole life insurance.
What Is Whole Life Insurance?
Whole life is also called permanent life insurance. If you keep paying the premiums, it remains in effect indefinitely. So, you won’t lose your safety net as you age. There are more components to consider with whole life insurance. For example, your policy has a cash value, giving it an investment component.
Part of your monthly premium goes to a savings account. The tax-free account grows in value. How much money gets put aside depends on your individual policy. Work with your insurance agent to determine the policy that best meets your goals.
Here’s what you can do with this cash value:
- Pay for your life insurance
- Use it as a retirement fund
- Borrow money against it
Combining your insurance and investment forces you to save money. If you aren’t good with money management, this could help you build a nest egg for future needs. Some whole life policies pay dividends as well.
If you have a complicated financial situation, this money could pay the estate tax, freeing up the estate for your beneficiaries.
Compared to term life, whole life insurance has much higher premiums.
Contact Us Today
If you’re looking for life insurance in Atlanta, GA or around the state, contact Rob Hill Insurance Group today. We can set up an appointment to discuss whole and term life insurance as well as your other insurance needs.