Do you know the difference between Term and Permanent (whole life) insurance?

Term life insurance provides coverage for a specific period of time, typically ranging from 10 to 30 years. If the policyholder dies during the term, the death benefit is paid out directly to the beneficiary(s) tax-free. If the policyholder does not die during the term, the policy will simply expire and no death benefit will be paid (nor any premiums returned). Think of Term life insurance as “temporary” coverage and is generally the most affordable type of life insurance. It is a popular option for people who want to ensure their loved ones will be taken care of financially, or large debts paid off (like a mortgage) if they die unexpectedly.

Whole life insurance, also known as “permanent” life insurance. It provides coverage for the policyholder’s entire lifetime. In addition to the death benefit, whole life insurance also includes a savings or cash accumulation component, which can accumulate cash value over time. This cash value can be used to pay premiums or borrowed against the policy in the future. Because whole life insurance provides coverage for the policyholder’s entire lifetime, it is generally more expensive than term life insurance. However, it can also provide a source of savings and long-term financial security.