Term Insurance and Whole Life Insurance: The Difference

>> Saturday, December 11, 2010

Term insurance and whole life insurance. Before purchasing any insurance plans, make sure that you know the answer to the question, “What is the difference between term and whole life insurance?”.

Here are three of the basic differences between the two:

  1. Typically, term insurance requires lower monthly premiums compared to whole life insurance.
  2. Term insurance plans provide coverage during a specified period. On the other hand, whole life insurance is a life insurance with an investment component.
  3. Lastly, there is a risk involved if you outlive the term of the insurance policy. You will not be receiving any amount if this happens. Whole life insurance, on the other hand, eliminates this risk by allowing you to take on loan against the amount you have already invested.

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