When it comes to providing financially for loved ones after your untimely death, there are two main types of life insurance to consider: term and whole life. The main differences between these two types of life insurance are the length of coverage and the cash value. Term life does not offer a cash value, and since it is purchased for a specific period (10, 15, 20, or 30 years), you could outlive the policy and not receive any benefit. Conversely, whole life insurance is valid for your lifetime and includes a cash value, but those benefits come at a higher price point.
Both whole life and term life insurance policies include a payout – otherwise known as a death benefit – that cannot change and is guaranteed. If you outlive your term life policy, there is no payout, and although you have the option to extend the policy, it will likely be at a higher cost. Whereas term life insurance does not generate cash value, whole life does and can be used as a mechanism for investment. The cash value is meant to be used, and a loan can be taken against it for any purpose; however, if you die without paying back the loan, any outstanding figure is deducted from the payout.
With these differences fresh in mind, there is no better time than now to safeguard your assets and protect your loved ones than by purchasing a life insurance policy. At Windgate Insurance Agency Inc. in New Windsor, NY, we recognize and understand that choosing between life insurance policy types can be daunting, so we strive to simplify the process. Give us a call today to learn how we can help you with all your insurance needs.