The two types of policy that can be bought from an insurance company are term policy and whole life policy. Each of them has its pro and cons which make them unique from each other. They are also meant for different types of people who create the value they would like to enjoy from an insurances policy. Because people?s needs change, a person may deem it fit to convert his policy to a whole life policy. Here are valued you will realize from these policies:
Term Insurance Policy
This is mostly designed for those who would like to receive life cover over a short period. It is also recommended for those who can?t afford the high premium charged on the whole life policy. In this case, compensation is only made after death. There is also an increase in premium at the rate unique to the type of term insurance policy you have purchased. It is important when:
- Protecting needs
With needs like a growing family, you feel the pressure to ensure that their lives are sustained even long after you are dead. Term insurance policy is therefore meant to cater for their financial needs as you don?t get to use it in your lifetime. This makes it accumulate to the desired high levels.
- Experiencing hard financial times
You can use it to supplement your policy when you face financial constraints. It, therefore, eases the burden to having to struggle when income becomes lower than expenditure.
Whole life insurance policy
This policy gives a twist on our perception of a %LINK2. Unlike term insurance policy, whole life insurance policy allows you to enjoy the benefits of your savings when you are still alive and when you die. Whole life insurance:
- Is very secure
The validly of your insurance cover remains intact regardless of the situation you are in. As long as you do not default on your payment of premiums, you can sit back, relax and know that you are in safe hands even when you live for more years than was expected.
- Has a cash value
If you ever get stuck in the future, you can get policy loans through your insurance cover. This allows you to sort issues like payment of fees and purchase of a home. This provision found in whole life insurance, therefore, allows you to enjoy your cover while still alive, unlike term life policy.
Try to understand the life insurance term that comes with each plan. This will help you make an informed decision based on the benefits enjoyed from each. If you are operating on a small budget, you can start with term insurance policy and later convert it to whole life policy when you get stable.