What Does Term Life Insurance Cover?

Term life insurance offers a death benefit, but does not offer living benefits. If you pass on while your policy is in effect, your beneficiary receives the benefit. However, if your policy ends before you decease, and you choose not to renew your policy or convert it to a whole life policy, you will not receive any kind of financial reward. Your family also will not be able to receive your death benefit if you fail to pay your premiums.

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What Does Whole Life Insurance Cover?

Whole Life Insurance policies acquire a cash value that increases over the life of the policy. That cash value is called a guaranteed cash value and the policy holder may choose to terminate his/her policy at any time and claim the cash value he/she has built.

A whole life Insurance policy holder can also borrow against their plan's cash value and often retain the option of not paying it back.

like term life Insurance policies, whole life Insurance policies also offer death benefits.

Why Do People Choose Term Life Insurance Over Whole Life Insurance?

Both term life insurance and whole life Insurance are helpful insurance products; one is not better than the other. However, one type of policy may suit you better than the other; If you want short term life insurance coverage that will provide your family with cash in the case of your death and want lower monthly premiums, then term life Insurance is probably right for you. If you are interested in receiving more financial benefits from your life insurance policy, you may want to consider whole life insurance.

Want more information about how term life insurance and whole life insurance differ? Read our our article on Term vs. Permanent Life Insurance.

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Term Life Insure provides information at no cost concerning insurance products and services but is not an insurer or an agency. Please speak to your insurance agent for more information. Not all products are available in all states.