Term Life Insurance Quotes

Term Life Insurance Quotes

Term life insurance has become the primary choice for young families that have significant financial obligations. Why is this and what is the difference between term and whole life policies?

Term Life Insurance and Whole Life - What are the differences?

Term life provides coverage for a person against death for a limited time period. Usually this is between 10 and 30 years. This is the term. It is common for parents to purchase a term that lasts until their kids are through college, or when they reach retirement. The reasoning is, after the kids have graduated college, they should be young adults able to fend for themselves and will not require a death benefit if a parent dies.

Whole life is a permanent policy that does not expire and provides essentially the same coverage as term life insurance but has an investment component. Part of the premium you pay goes to the life insurance policy and the other portion goes into an investment account.

Which is better for you?

You should consult with a financial advisor, but generally, younger families find term life insurance appealing for 2 major reasons:

  1. Cost - Term life insurance polices have significantly lower premiums that provide substantial coverage in the event of a death of a spouse.
  2. Investments - With whole life, the insurance company is investing a part of your premium in investments such as stocks and bonds. These investments may lag what you can achieve in mutual fund or stock investments on your own. The fees and commissions can also be significantly higher than no-load mutual funds.

Let's use myself as an example!

My wife and I applied for term life insurance quotes online and received multiple quotes within minutes. They averaged between $500 to $1,500 a year for the term we requested. Guess how much the whole life policy averaged with the same death benefits?

$11,500 a year!

That's a huge difference between the two types of life insurance policies. I could take the difference I am saving on the term life insurance policy and invest it myself and more likely than not outperform the whole life investment rider.

What's your next Step?

Shop and Compare multiple Life Insurance quotes for free. This is the service I used!

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