Understanding Term vs. Whole Life Insurance: Which Is Right for You?

When it comes to life insurance, choosing the right policy can be overwhelming. Two of the most common types are term life insurance and whole life insurance. Here’s a breakdown of both to help you decide which one is right for you:

Term Life Insurance

Term life insurance provides coverage for a specific period of time, typically 10, 20, or 30 years. It is the most affordable option and offers a high coverage amount for lower premiums. It’s ideal for people who need coverage for a specific financial responsibility, such as a mortgage or raising children. However, it does not accumulate cash value.

Whole Life Insurance

Whole life insurance provides lifelong coverage and includes an investment component known as the cash value. While premiums are higher, the cash value grows over time and can be accessed for loans or withdrawals. Whole life insurance is often suitable for people looking for long-term financial protection and willing to pay higher premiums for a guaranteed payout.

Which One Should You Choose?

Choosing between term and whole life insurance depends on your financial goals and current needs. If you’re looking for affordable, temporary coverage, term life may be the right choice. However, if you want lifelong coverage with a built-in savings component, whole life insurance could be a better fit. Consider speaking with an MLMI financial advisor to tailor the best policy for your situation.