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Life Insurance ConsultationAfter people decide that they need to buy life insurance, the next thing to determine is which kind of coverage to buy. The right answer might depend upon the consumer's needs, preferences and budget.

This is a short explanation of the differences between whole life insurance and term life insurance:
  • Term Life Insurance: These policies last for a specific length of time (the term). In its purest form, this kind of coverage only provides insurance, does not grow a cash value and has no value after them term expires. Because these policies expire and don't grow as an asset, they cost less than permanent policies.
  • Whole Life Insurance: These are cash-value policies that never expire as long as they get paid for or have been paid off. Over time, the policy may have a value beyond just providing a death benefit. Because they can provide lifetime coverage and grow a value, these policies will cost more than term life insurance for the same amount of coverage.

Is Whole Life or Term Life Better?


Most people will be advised to consider term life insurance just because it's possible to afford a lot more coverage for less money. Many agents and financial advisors will suggest saving money on premiums and using it to make other investments. For people who want to cover their mortgage or provide for a spouse and kids in case they pass away, term life insurance might be the better choice. Because premiums are lower, buying a policy with a face value of several hundred thousand dollars or even a few million dollars should be much more affordable.

However, it's important to remember that whole life insurance policies do grow a cash value and don't expire. Older people who may hope to leave money to their heirs, or even rely upon this asset during retirement, might choose whole life insurance instead of term life insurance. Policy owners may choose to borrow against the cash value, sell their policy for cash or even find a buyer for a life settlement. Even though whole life insurance costs more, it might be more useful for certain people.

It's a good idea for consumers figure out how much coverage they need, their budget for premiums and what they hope to use their coverage for. After that, it's simple enough to compare premiums to figure out which type of life insurance makes more sense.

Ready to talk about coverage? Call First Insurance Group at (800) 511-2892 for more information on Kentucky life insurance.
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