With life insurance, there are essentially two different policies which are term life and whole life. We wanted to review the two different policy options.
Term Life Insurance
Term Life Insurance is in essence its name, it lasts for a certain amount of time and then expires at the end of the term. Should you die before the term is up, your beneficiary would receive a death benefit. The money you pay into your term policy goes towards the death benefit.
Term Life Insurance is more affordable than whole life and the premiums are generally a lower cost. Should you live past the length of the term, you have several options you could do:
- Convert it into a permanent policy
- Keep your current policy at a higher premium
- Buy a new policy
- Let the policy expire
Keep in mind for this type of insurance, once the term is up, you do not receive the money you paid into it.
Whole Life Insurance
Whole Life Insurance does not expire, so it lasts your whole life. With whole life you get a death benefit and a cash value. A cash value is similar to an investment, tax-deferred savings account. It accrues interest over time and once it accumulates enough value it can be withdrawn.
Keep in mind that a whole life does cost more than term life. But it is beneficial depending on your living situation and any dependents you may have.
Deciding on what type of life insurance you need, really depends on dependents and what you may want to leave your family after you pass away. If you’re unsure what type of insurance is right for you, give us a call and we’ll discuss the options with you.
Rothenberger Insurance Services is a full-service insurance company that specializes in auto insurance, home insurance, and all commercial insurance services. We are located in West Reading PA and help many individuals and businesses in and around West Lawn PA, Wyomissing PA and Reading PA.