We had a question posted on our Facebook page asking the following question; What's the difference between "term" and "whole" life insurance, what's the best at what age, and how do you convert? We turned to our own Bill Zimmer for insights on these questions, here's what he said.
Provides protection for a certain period of time or “term.” If death happens during the term then the beneficiary is paid the proceeds tax free and if the insured live out the term then the policy simply expires or the premium raises substantially . Term life insurance is typically less expensive, but can become very costly once the term ends. Usually there are conversion plans that can be set up to move to a permanent policy that builds cash value.
The policy will last the whole life of the insured and upon death the face value will be paid. The premium is a set rate, meaning it will not change regardless of age or life of the policy. Whole life insurance policies carry a tax-deferred cash value which can be accessed as a policy loan.
What is best at what age?
Well that depends on the person, what is going on in their life and what they need life insurance for. A 25 year old single woman would have a lot different needs than a 35 year old man who's married and has two children.
How do you convert?
That can be done by your agent who will submit the necessary information. When you are ready or have questions it is best to contact them. Like mentioned above, term plans can be set up to convert easily to a permanent plan before expiration.
Want to learn more? Contact Bill today to see what your options are.
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