If you are ready to invest in life insurance, you may be wondering which is better for you: term or permanent insurance.
One of the best things you can do for your financial plan and future is to invest in life insurance. This insurance policy is put in place to ease the burden of tragedy and loss. This policy guarantees that when the policyholder passes away, their set beneficiaries will receive a certain amount of money that the insurer pays. However, some people have difficulty determining whether to invest in permanent insurance (also referred to as whole life insurance) or term insurance.
Learn more about the differences between term and permanent insurance below.
What is the Difference Between Term and Permanent Life Insurance?
The significant differences between term and permanent insurance policies can be boiled down to how much it costs and how long the policy is valid. When compared to permanent policies, term insurance seems a lot less of an investment. A term policy covers you for a set amount of time and pays your beneficiaries only if you die during that period. On the other hand, permanent or whole life insurance covers you for your entire life, making it a bit more complex and a more considerable investment.
Both policies allow your beneficiaries to spend the payout on various expenses, like a funeral, mortgage payments, tuition, and more. Because every situation and specific coverage needs vary from one person to the next, one type of insurance may be better for you than the other.
How to Choose Between Term and Whole Life Insurance
Choosing between term and permanent insurance can be overwhelming for some, so we are here to break it down for you:
Consider choosing term insurance if you:
- Only need or want a policy to cover a short-term need. A term policy can help your loved ones after you die while you still have substantial financial obligations, like raising a family, a mortgage, or paying tuition.
- You are looking for the most affordable option. Term insurance is less expensive than permanent life insurance. Term insurance may be a good option if you are young and healthy.
- You are considering permanent insurance in the future but cannot afford it right now. Many term policies can convert to permanent policies. Remember that the deadline for conversion will vary from one policy to the next.
Consider choosing permanent insurance if you:
- You want to leave money for heirs. You can use your death benefit payout as an inheritance regardless of when you die. If you have beneficiaries listed on your policy, the payout will go right to them and not through your estate.
- Can afford higher premiums. A permanent policy means a lifelong commitment. Make sure you can afford it so your policy does not lapse.
Looking for Life Insurance? Contact Bear River Mutual Insurance.
Whether you want permanent or term life insurance, the professionals at Bear River Mutual Insurance can help. Our team of experts can help you find the best policy with the best rates and protection to give you and your family the peace of mind you deserve. We are dedicated to finding you and your loved ones the perfect balance of security and value. We proudly serve Provo, Orem, Salt Lake City, and surrounding Utah cities. Contact us for a quote today.
