The Real Difference Between Term And Whole Life Insurance
The world overall economy has taken a massive knock during the last few years and this is the major reason why most people are trying to find financial protection and backup, even more so in the event of a loved one’s passing away. The best thing to do when you’re searching for a financial back up plan is to consider car, home, business, health and life cover. With the several types of insurance coverage available today, it’s becoming increasingly hard to distinguish which will be more suitable to your requirements as well as your pocket. Two of the most popular forms of life insurance coverage are those of term insurance and whole life insurance. It is important to know what the real difference between these types is before you apply for life cover.
Understanding the difference between term life insurance and whole life insurance is useful when you are assessing your lifestyle and circumstances and when choosing which policy will be most suited to you. These policies have their unique pros and con’s that should be measured up to your preferences before selecting either one of them. Choosing life cover is an extremely important step in every person’s life and you need to evaluate your status and needs before choosing.
A whole life insurance plan can be defined as cash value life insurance. Using this type of policy, you will be able to borrow some of the funds you’ve accumulated over time for whatever valid reasons. You will, however, have to pay this money back over some time. All this will probably be stated in an agreement between you and the insurance provider. Another distinctive difference between whole life insurance and term insurance is that with whole life insurance, you will be able to withdraw the whole sum you’ve gathered over time at any time before you die, which means, at a later period of your life. One of the advantages of whole life insurance is that the funds used to pay the policy monthly, the premium, may become an essential asset. A portion of your monthly premium will go towards your policy and the rest will be invested on your behalf by the insurance company that can be used in future emergencies like hospitalization, car repairs or medical bills.
The difference between whole life and term life cover is in the titles itself. Term life insurance is exactly what the title refers to: insurance that protects you for a particular period of time. Not everyone is suitable to buy term life insurance: usually, the head of the household, or someone who has many financial dependants will be most likely to be able to obtain a term life insurance policy.
Life can throw unforeseen curveballs at us: usually things that we are not prepared for. We knew we had to prepare for unexpected tragedies, but we just kept putting it off and postponing it to when the kids haven’t any sporting activities after school, when the refrigerator and kitchen cabinets are filled with food, when the house is in order and all our bills are paid for. We keep putting it off until the next day, next week, next month. This is when tragedy likes to hit. So, before you start saying “I should have” or “I was going to”, make the right choice, and be prepared for the at times intolerable things life throws at us. Life cover may be the beginning.
For more information about life cover visit the website http://www.insurance.co.za
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