Reader’s Question:

I have two friends here in Tulsa, Oklahoma who are both insurance agents and they are pushing me to get life insurance. However, one is saying I should get term life insurance while the other says I should get whole life insurance. Can you tell me the pros and cons of each?

Jesse

Tulsa, OK

Hi there Jesse. I’m sure your friends in Tulsa, Oklahoma only mean well in offering you life insurance. Please do not succumb to either one just because of peer pressure. It is best that you fully understand the product that you are getting.

Of course each of them have their own strengths that they bring to the table. But you are the sole decider on which most suits your needs. The difference in whole life and term insurance are as follows.

First is the duration of coverage. Term insurance, as the name implies, will only give you coverage for as long as the duration of the policy. With whole life insurance, you will get coverage for the whole of your life assuming the policy is still in effect. That is, you are still paying your premiums regularly, or you have completed the premium payments.

Second, Whole life insurance gives cash values on a periodical basis depending on your policy and may even earn you dividends with certain insurance companies and will still give your beneficiaries a death benefit. On the other hand, Term life insurance will not give you any cash values at the end of the term. In short, if you do not die, you do not win with term life insurance because you get nothing back at the end of the term. Hope these will help you come to a decision.

Tags: life insurance