Whole Life vs. Term Life Insurance: Which Policy Is Right for You?

You know you need life insurance. After all, if something happened to you, you wouldn’t want your family to suffer financially while they are already struggling with their grief, would you? Life insurance can give you peace of mind knowing your loved ones will be taken care of if you are unable to do so yourself. However, you’ve probably heard that there are two main types of life insurance: whole life and term life. How do you decide which one is right for you? We’ve recapped the differences so you will have a better idea of what may work for your situation.

What is Whole Life Insurance?

Whole life insurance is insurance designed to cover you for your entire lifespan (whole life) as long as you continue making payments. Because there is no cap on how long the coverage will last (and it will most likely eventually pay out), it is usually more expensive than term life insurance. One big benefit of whole life insurance is that it can serve as a safety net of sorts, as you can cash out what you’ve paid in at any time if you find you’re in a serious financial bind or your insurance needs change.

What is Term Life Insurance?

Term life insurance covers you for a set period, be it 5, 10, or 30 years. Because there is a designated end to when the insurance will pay out, the rates are lower. Keep in mind that there is not usually a cash-out option, so the only way it pays out to your family is if you pass away.

Which Type of Life Insurance is Best for You?

In reality, term life and whole life insurance serve different purposes. Whole life is a savings program, of sorts, and gives you long-term protection. Term life is a good choice for those working on a budget as it assures the family is taken care of if an unexpected death occurs. It is important to look at your current financial, health and family situation to see which fits your needs.

About Haughn & Associates

Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.