Term Life vs. Whole Life Insurance!

In the 30 plus years that I have been helping people make good decisions about life insurance, I start the conversation with only two questions. First, if you died today, would somebody suffer financially? Second, do you care? If they answer yes to both questions, there is a need for life insurance. Having established that there is a life insurance need, next we must discuss what is the appropriate amount of coverage. This always leads us into the age-old discussion of term life insurance and whole life insurance. To greater understand the difference, let’s look at both types of insurance.

What is Term Life Insurance? Term life insurance provides a guaranteed death benefit only if the insured person dies during the term, or the period the policy is in effect. The premiums are level for the duration of the term. At GCU, our term products offer you the choice between a 10-, 20- or 30-year term. Having these different options allows you to choose the right coverage based on your situation. Term insurance is usually very affordable because you need to die during the term of the policy and there is no cash value component. The lower premiums for term life insurance makes it a popular choice for younger families that maybe starting a family and/or buying a new home—term insurance usually fits better in their already tight budgets.

What is Whole Life (Permanent) Insurance? As the name implies, whole life insurance lasts for your whole life. As long as you keep making premium payments, this type of lifelong coverage will pay a guaranteed death benefit when you die. This eliminates the concern of outliving your life insurance policy. Premiums for whole life are guaranteed to stay level for the insured’s life, but be prepared to pay a much higher premium than you would for term coverage. The advantage of paying a higher premium is that whole life earns cash value over time. The insured can borrow against the cash value of the policy or withdraw any accumulated dividends. At GCU we have a portfolio of whole life products designed to meet your needs.

Which is better? This is the million-dollar question! Both Term Life and Whole Life protection can play an important part in providing financial security. Many people actually purchase both types of coverage to protect their loved ones for shorter & longer-term needs. The real answer to “which is better” is the best coverage is any life insurance you have in-force when your family needs it. There is an old saying in the life insurance business, “Life insurance is like a parachute—if you don’t have it when you need it, you will never need it again!”

Jeff Long | Sales Director