Whole or Term: Which Life Insurance Is Best for You?

If you’ve never purchased life insurance, it can be tough to even know where to start. Thankfully, at Rehm Insurance, we not only have the years of experience to help you through these tough questions but also are located right in your backyard! 

The first thing you will want to determine is which kind of life insurance you are looking to purchase. In its most general of terms, life insurance is divided into two main categories: Whole Life and Term Life.

When you are looking at life insurance as a long-term investment, you likely want to consider Whole Life Insurance. Let’s look at some of the major traits of these policies.

A whole life insurance policy increases in value over time, adding a cash value component that some choose to tap into while still alive.

You can think of a whole life policy as being somewhat like the equity you build when owning a home. Should you find that after some equity is built up, you need to take a loan out against it, this policy allows you to do so. 

Another plus in having whole life insurance is that it lasts just that – your whole life. Many term life policies are scheduled to end coverage at a predetermined date. However, you do need to keep up with payments on a whole life policy throughout your whole life.

Because of its value, the cost of a whole life insurance policy is typically far higher than the cost of a term life policy. Studies have shown that whole life can cost 15 times more for the same end payout.

If your main goal is to simply be sure that your family is secure should anything happen to you, then Term Life Insurance is likely the choice for you. This is more of a “pure” solution, where you purchase a policy and want it simply to cover you in the “what if” moments of life.

How long you walk this earth is a question no one can answer with certainty. However, term life insurance policies typically are set to predetermined deadlines. Plans are often for five, 20, or 30 years. 

Once the time period expires, so does the policy. You would have to seek an alternative policy if you wanted to continue to be covered.

Another plus for Term Life policies is that they are typically more simple to understand. These plans are more direct. If you die, your family gets X amount of dollars. It is really that straightforward!

Other plans can become more complicated, adding features that can help and hinder your future goals.

If you are a parent, you may view a term life policy as a layer of protection, making sure that your children are cared for, should you pass away. It also can protect families with things like the cost of a funeral, not to mention remaining debts and cost-of-living expenses.

In the world of insurance, there is no “one size fits all” format. Each individual and family has its own unique needs and circumstances. Some may focus on what is affordable month-to-month, while others may be looking for an alternative way to invest in the future.

By sitting down with my team at Rehm Insurance, we can analyze what products best serve your precise needs, and package policies that will work to meet those needs. Call us today to schedule an appointment, so we can find the best life insurance for you!