If we look up mid to late 20th century the trend was to buy whole life insurance policies amongst the masses. Whole life insurance allows the beneficiaries to be able to claim a certain amount of money after the death of the provider. This allows families to be able to financially support themselves after the death of their provider, so it serves as a mean of protection.
When it comes to life insurance, there are two main types of insurance, whole life insurance and term life insurance. Term insurance was not as popular those days but lately it has gotten more popular lately. If you are confused between the two options, you can read through the comparison below.
Whole Life Insurance:
Whole life insurance is covered throughout a person’s lifetime. It is a more expensive option than term insurance since the investment/premium increases along with the mortality rate. Whole life insurance is a good option for people who have health concerns or a family with a history of disease.
Another advantage of whole life insurance is that the policy owner can at some point borrow a certain cash value as well at some point. However, whole life insurance has a relatively slower investment rate so it is not as advantageous from a financial point of view.
Term Life Insurance:
Term insurance unlike whole life insurance only provides a level premium for a certain time period, normally between 10-20 years. Term insurance can cover things like a college education, the mortgage or compensation after the loss of the primary earner.
Once the term has expired, it can be renewed again. Finding good term insurance is not a difficult task and the prices are benefits are normally competitive. Another good thing about term insurance is that it is a more affordable option than its alternative.
However, term insurance has no cash value unlike whole life insurance, so by the end, the policy will have zero value.