Which type of life insurance should you buy, term or whole?


Life insurance is a way to protect your family and loved ones. There are many types of life insurance policies available, each with different benefits and costs.

Term insurance

Term insurance is a type of life insurance that provides a death benefit for a specific period of time. In other words, it’s like an annual renewable term life insurance policy with an expiration date; the difference is that you can also purchase term insurance in one lump sum or as monthly payments.

Term policies are most common for young people who don’t need protection until they’re older and more financially stable because they have larger contributions from their employer or parents intended to pay for the premiums. For example, a 25-year-old may choose to buy 10 years’ worth of premium payments so he has some cash flow while still being able to save up money for other goals like buying a home or starting his own business.

Whole life insurance

Whole life insurance is a type of permanent life insurance policy. It’s an investment as well as insurance, and you can borrow against it. Even though it may seem like an expensive option at first glance, investing for life can be one of the most cost-effective ways to purchase long-term financial security for yourself or your loved ones if used correctly.

A couple of things to keep in mind: First and foremost, whole life isn’t meant to replace short-term savings accounts—it’s meant to be used alongside them so that you have both types working together toward achieving your goals. Second, while there are many different types of policies out there (such as universal), each one serves its own purpose differently depending on what kind of person you are looking for when purchasing one; this means shopping around before making any decisions about which plan will suit you best!

Universal life insurance

Universal life insurance is a hybrid policy that combines the features of term and whole life insurance. It’s more flexible than term insurance but less flexible than whole life insurance.

Universal policies don’t offer any cash value, but they can be used to build cash value when you need it most (like when your income drops).

Permanent life insurance policy

A permanent life insurance policy is a whole life insurance policy that has a cash value. The policyholder can borrow against the cash value, which means you can take out loans from your cash-value account during retirement and use them to pay for things like college or retirement.

The interest rate on permanent life policies is often higher than that on term, universal, and whole life policies because there’s no need for investment management when you have a guaranteed payout due to death at a certain age (or term).

There are many types of life insurance policies.

There are many types of life insurance policies. Here’s a quick rundown:

  • Term life insurance: This type of policy pays you a death benefit for the term or number of years you select, but it expires when your term ends. You must pay monthly premiums to keep the policy in force and active.
  • Whole life insurance gives your beneficiary a guaranteed investment value (GIV) and any cash values that have built up during the policy’s term.* Universal life insurance: This type is designed to provide tax-free income from investments inside it forever. It also allows you to change beneficiaries anytime after purchasing it. Permanent Life Insurance Policy: A permanent plan offers more flexibility than other types because there are no limits set on how much coverage can be purchased through these policies—you can buy additional levels if necessary.


The key takeaway should be that life insurance is not a one-size-fits-all product. It has many different features, from term and universal to whole-life policies. Each of these types has their own pros and cons, so it can be difficult to choose the right one for your situation.

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