Term vs. Whole Life Insurance: How to Choose
Life insurance helps protect the people who depend on you. But once you start looking, the first question is usually: term or whole life? Here's a plain-language look at the differences.
Term Life Insurance
Term life covers you for a set period, such as 10, 20, or 30 years. If you pass away during the term, your beneficiaries receive the death benefit.
Typically lower cost for the same amount of coverage
Good fit for needs with an end date, like a mortgage or the years your kids are growing up
No cash value, so if the term ends, the coverage ends
Some term policies can be converted to permanent coverage later
Whole Life Insurance
Whole life is a type of permanent life insurance. It's designed to cover you for your entire life as long as premiums are paid.
Lifelong coverage
Builds cash value over time, which you may be able to borrow against
Higher premiums than term for the same death benefit
Often used for final expenses, estate planning, or leaving a legacy
What About Universal Life?
Universal life is another type of permanent coverage that can offer more flexibility in premiums and death benefits. It can be a middle ground for some families.
How to Decide
Ask yourself:
How long will my family need the income replaced?
Do I have a mortgage or other debts to pay off?
Is my budget focused on getting the most coverage for the lowest cost?
Do I want coverage that lasts my whole life?
Many families start with term coverage, while others combine term and permanent policies to cover different needs.
Let's Talk It Through
We'll help you estimate how much coverage you may need and compare options. Adding life insurance can also help you qualify for bundling discounts on your home policy. Learn more about our life insurance or call (818) 459-3400.
This article is for general information only and isn't financial advice. Policy features, availability, and underwriting vary. Amik Gasparyan Insurance Agency, Farmers Insurance agent, CA License #6014107.