Term Life Insurance Comparison

When considering a Life Insurance purchase, the age-old question is “term or whole life?”  Make sure you are aware of the reasons you need life insurance, and these reasons will be your guide in answering that question. "Most individuals shopping for life insurance really want to understand the difference between term and whole life products.  I'm glad we are able to give each one of our clients a customized benefit analysis," said Vince Bagni, of Paramount Life Insurance.

Term Life Insurance will afford coverage to you for a specific period.  Once this period is up, you can no longer qualify for benefits under the policy if you die.  For example, if you buy a 20yr level term life insurance policy, after 20 years, the policy ends and so does your obligation to pay any premiums. 

Alternatively, a whole life insurance policy will last until the day you die.  You will continually pay premiums on this policy for the rest of your life.  The advantage of a whole life policy over a term policy is that a portion of your premium is invested and that investment will grow over time.  It will provide you with a return if you ever decide to cash the policy in while you are alive.  If you do not cash in this investment portion, it will become part of the insurance settlement to be paid to your beneficiaries.  Be sure to read the fine print of your policy however, as the invested portion of the policy is not always returnable to the beneficiary. 

When exploring the differences between these two types of policies, it is important to understand that whole life policies are far more expensive than term life policies.  It is a good idea to obtain quotes for a term life insurance policy as a comparison to whole life policy so that you can actually compare the cost verses value of either type of policy. 

It is also important to choose companies that have a high financial rating.  Rating companies such as AM Best and Standard & Poors routinely rate insurance companies based on financial performance, customer service, and their ability to pay claims. 

With a term life insurance policy and with universal or whole life policies it is important to remember that they are designed to benefit the people you leave behind in the event of your death.  The most important thing you can do in considering either type of policy is to calculate the cost incurred by your family in the event of your untimely death.  This cost will include the loss of your income, the payment of your debts, as well as your funeral expenses.  Remember that although term life policies are less expensive than whole life policies, the least expensive product is not always the best choice.  This is also true when comparing one term life insurance policy against another term life insurance policy.  Two policies with similar face values may have a cost that is vastly different from each other.  This may have much to do with the rating of the insurance company involved.  You may find that a lower rated company with lower ratings, customer service and the ability to pay claims issues the least expensive policy.  "Many of our clients ask us what the major difference would be when purchasing insurance through a mutual life insurance company," noted Bagni. 

As with any insurance decision, be sure to consult a qualified and educated broker or agent.  Get more information today at Paramount Life Insurance.  They offer a FREE benefit analysis to all of their clients.  Whether you are looking for a term policy or a universal life policy, we will find you the solution that makes good business sense.  Get real time life insurance quotes today. 

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