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A Big Difference Between Term And Whole Life Insurance

Author : Frederick Singletonne

The world financial system has taken a huge knock during the last couple of years and this is the major reason why everyone is looking for financial security and backup, even more so in the eventuality of a loved one's passing away. The best thing to do if you are looking for a financial back up plan is to look at car, home, business, health and life cover. With the various kinds of insurance policies currently available, it is becoming increasingly hard to identify which will be more suitable to your needs as well as your wallet. Two of the most popular types of life insurance coverage are that of term insurance and whole life insurance. It is important to know what the difference between these two types is before you apply for life cover.

Understanding the distinction between term life insurance and whole life insurance is useful when you're evaluating your lifestyle and circumstances and when choosing which policy would be most suited to you. These policies have their unique benefits and con's that should be measured up to your requirements before choosing either one of them. Choosing life cover is an extremely important step in every person's life and you have to evaluate your status and needs prior to buying.

A whole life insurance plan can be described as cash value life insurance. Using this type of plan, you will be able to gain access to some of the funds you have gathered over time for whatever legitimate reasons. You will, nevertheless, need to pay this money back over some time. All this will be stated in a contract between you and the insurance provider. Another distinctive difference between whole life insurance and term insurance is that with whole life insurance, you'll be able to withdraw the whole sum you have accumulated with time at any time before you die, meaning, at a later period of your life. An advantage of whole life insurance is that the money used to pay the plan monthly, the premium, may become an essential asset. A portion of your monthly premium goes towards your policy and the rest will be invested on your behalf by the insurance company which can be used in future crisis situations like hospitalization, vehicle repairs or medical bills.

The main difference between whole life and term life cover is incorporated in the titles itself. Term life insurance is exactly what the name refers to: insurance that protects you for a specific period of time. Not everyone is suitable to purchase term life insurance: usually, the head of the household, or someone that has many financial dependants would be most likely to be capable of obtain a term life insurance plan.

Life can throw unpredicted curveballs at us: usually things that we are not prepared for. We knew we had to prepare for unexpected tragedies, but we just kept putting it off and postponing it to when the children haven't any sporting activities after school, when the fridge and kitchen cupboards are filled up with household goods, when the house is in order and all our bills are paid for. We keep putting it off until the next day, next week, next month. This is when disaster likes to strike. So, before you start saying "I should have" or "I was going to", make the correct decision, and be ready for the sometimes intolerable things life throws at us. Life cover may well be the start.

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Tags:   life cover, term life insurance, whole life insurance, insurance

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Submitted : 2011-02-22    Word Count : 870    Times Viewed: 225