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At certain point of your life, you will definitely think of insurance. You may already have insurance coverage by the virtue of your parents, but you want to know more . Or you may just want to add more coverage to your existing policy. So many people would ask: What kind of life insurance policy should I get? What is Whole Life Insurance? What is Term Life Insurance? Which is better for me?

Well, this article will answer your basic questions.

What is Whole Life Insurance?

A whole life Insurance is essentially an insurance coverage that pays the insured if there is an accidental death or physical disabilities. There is also an additional cash value for this type of insurance. The longer you keep this insurance, the higher is the cash returns if you decided to give up the policy.

In other words, there is MONEY in this type of insurance.

This is a popular for people who have an established career or people who are more financially stable. The reason is that the whole life insurance tends to cost more. This is due to the additional feature of cash returns in the insurance.

This is good in the viewpoint of personal finance as there is investment involved

There are people who wants just the coverage for themselves. That is where Term Life Insurance comes into play.

What is Term Life Insurance?

A term life insurance provides a much higher insurance coverage for you if there is an accidental death or physcial disabilities. It is not expensive to buy a term life insurance because there is no cash value to the policy.

To put it simple, if you give up the insurance, no cash for you upon surrender.

This type of insurance are suitable for people who are have lower financial abilities. People who are in their 40s-50s who have not bought insurance at all should also look at this type of insurance.

So which one should I choose?

Here is my recommendation: take both. The reason is that whole life insurance, in general, has pays the insured lesser in events of death because part of your payment has been used to generate cash value. In view of the rising cost of medical expenses, I do not recommend to have a lower coverage for yourself.

Term life insurance are also very inexpensive. It can go as low as just $10/month for a good coverage. Yes, there is no cash value in return but the payout in unfortunate events is higher at a very low cost.

If you get both types of insurance to ensure a balance in terms of cover and cash value.

That is the best of both worlds, isn’t it?

Tags: Insurance //