Life insurance is designed to pay benefits to dependents when the policyholder passes away. Depending on your needs, you may choose either term life insurance or whole life insurance. What’s the difference between the two polices?
Whole Life Insurance
Many people view this type of policy as a good long-term solution, or similar to owning a home. Once approved and so long as you pay your premiums, your coverage cannot be cancelled, regardless of your health.
In contrast to a term life policy, whole life insurance builds guaranteed cash value, which can be used later on for any purpose via a policy loan. This is frequently referred to as living benefits, and can assist you with a down payment on a home, your child’s college tuition and anything else you desire.
Term Life Insurance
This type of policy is much like renting a home. You pay a set monthly premium for the term of your contract (usually 10, 20 or 30 years). Your insurance provider will pay benefits if you die during your term. However, once your term ends, you may or may not qualify for a renewal, largely based on your health.
This is a popular choice for many young adults because it is more cost-effective. Young parents may also choose to purchase a term life policy to supplement their permanent policy in times of high-protection needs, such as a growing family.
Learn more about which type of policy will most suit your needs. Call us at 888-279-9701 for more information on Colorado life insurance.