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INSURANCE |
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All the information you need to know about all types of Insurance policies |
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Tuesday, Sept 06, 2005
The
difference between Whole and Term Life Insurance
Whole
Life Insurance Whole life insurance is virtually just that. It offers you insurance until you are aged 65, although some companies will actually offer it until the age of 70. Taking on a whole life insurance policy now means that you will be paying lower rates because you are expected to be healthier the younger you are. This will benefit you in the long run; taking out any form of life insurance once you reach your 50s or discover you have a chronic illness will be a lot more costly but a lot more pertinent. You might think you don’t need life insurance now, but you do.
Whole life insurance is the more expensive version of the two life insurance types, however it is the all singing and all dancing option. You have a much greater level of options and you will be covered either until the need arises for a claim to be made on it or until it is terminated because you reach the age of 65.
Term Life Insurance Term life insurance is a cost effective equivalent
to whole life insurance that few people are even aware of. It offers
similar benefits to whole life insurance but is only available in short
term policies, of one year or more. Your monthly premium does work out
to be cheaper initially but in 10 or 20 years time when you come to
arrange a renewal on your term life insurance policy this won’t be the
case. With life insurance, the older you are the more you pay and if you
develop health problems during the life of your policy you will find
that these premiums will rise even more. As a short term solution term
life insurance is excellent, but should not be considered a long term answer.
Deciding on the correct policy is very much a personal decision and you should make your decision based on your own circumstances including the age of any dependants, your own age and of course your financial circumstances. A term life insurance policy could be an excellent way to provide cover in the short term but for a long term solution whole life insurance is really the only answer. You should consider providing as much cover as you can financially afford to; recent surveys have shown that less than 25% of life insurance claimants believed their partners had provided enough cover for them. Without this adequate level of cover your family may be forced to take on extra hours, extra jobs or even move to a smaller and more affordable home. Life insurance will help you take care of your family once you’re gone.
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Life
insurance is the one clear way to provide you and your family with the
peace of mind that they will be provided for in the event of your death.
It is no secret that a large number of households who lose their
principal wage earner find themselves struggling to meet the financial
obligations of their mortgage and other bills. Life insurance provides a
means for you to protect your family even while you are not around.
Without this help your partner or your children may find themselves in a
situation where selling the house and the car is the only option to keep
their heads above water. 
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