If you’re in the market for a life insurance product to ensure your family isn’t put in a difficult financial spot in the event of unfortunate circumstances, there are numerous options to choose from. Undoubtedly, it can be quite overwhelming to research which product best suits your needs. After all, there are many flavors of term and whole life insurance. And since you can’t see into the future, it’s really hard to know just which option (and length in the case of term insurance) will be your best bet.

In any case, one should seek out the expertise of a financial adviser before meeting up with an insurance salesperson. Undoubtedly, jumping right into a conversation with an insurance representative without putting in any research could be a bad idea, especially if they’re hungry to sell you a product that nets them the biggest commission.

Either way, it’s vital that you put in the homework, discuss things with the family, explore all potential scenarios (conduct a scenario analysis, so to speak), and make the move that not only helps you make the most financially sound decision but the one that gives you (and your family) the greatest peace of mind.

In this piece, we’ll stack up the term and whole life insurance so you can get a better gauge of which product you may wish to research first. Before you come to a decision, do take your time to really think things out because the last thing you want to do is have second thoughts in the months or years after you’ve signed that dotted line.

Key Points About This Article

• Term life insurance may be cheaper, but is a long-term one enough to give you peace of mind?
• Whole life insurance products may be trickier to fit into one’s budget. If you have the income and value the greatest peace of mind, though, it can make sense.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

The Case for Term Life Insurance

The main draw to term life insurance is the cheaper premiums you’ll have to pay. Undoubtedly, if you’re in your 40s and in great health, you may just get a pretty good deal on a six-figure policy. Though premiums will vary based on who you decide to go with and how long a duration you pick, term life insurance tends to be far easier to fit into a budget, especially if you don’t yet have a nest egg that’s in the seven figures.

The main drawback deals with uncertainty regarding the length of the term. Nobody knows for sure exactly how much time they have. Someone in their 40s may need a longer term than 20 or 30 years. Either way, it’s this degree of uncertainty that may cause some to go for whole life insurance, which covers one’s entire life.

Indeed, it’s far more convenient to go with whole life insurance and call it a day. However, the costs can really add up. And, in many cases, those holding such policies will pay the price. As always, there’s a price to come with certainty. And in the case of whole life insurance, I believe the cost is too great for those with limited budgets.

The Case for Whole Life Insurance

If you have a sizeable nest egg and ample room in your monthly budget, a whole life insurance policy may seem more appealing to you. Unlike term life insurance, whole life insurance comes with some cash value, which can build with time. There are many benefits to this. However, there are also complexities associated that warrant a meeting with your financial adviser. And do know that returns from such a policy are likely to pale compared to most other investments (think stocks and bonds).

Additionally, there’s a guaranteed death benefit amount, which may appeal to many prospective life insurance customers, as well as other unique features that can be tailored to your specific needs.

Further, if you’d rather not think about when you’ll need life insurance to kick in (nobody likes thinking about morbid things, after all) and you fully understand the premium you’ll have to pay over term life insurance, it may make sense to go for whole life insurance over a term one.

Either way, the main benefit, I believe, of whole life insurance is the peace of mind it can provide, knowing your policy will last a lifetime.

Which is the Better Insurance Product for You?

This ultimately depends on your unique needs. However, if I had to go with one, it’d have to be term life insurance because I’m personally a fan of the lower premiums.

Even if you could make the higher premium payments on a whole life plan, I’d opt for term life insurance and put the savings into a dividend-paying equity portfolio that can grow at a market rate over time. For those comfortable with uncertainty, the mix of term life insurance and a stock portfolio can be economical for most.

That said, if you’re keen on whole life insurance and your financial adviser thinks it’s right for you, whole may trump term life.

A Quote in Minutes

Even if you’re in a similar financial position and unsure about the exact amount of coverage needed, it’s always wise to get a quote and explore your options.

A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. With affordable rates and customizable policies, life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.

Click here to visit our website and learn how to get a quote in just a few minutes.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.