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Ph 480-535-5709

Fax 480-785-4930

Txt 480-878-7715

 600 E Baseline Rd. 

Ste B-3 Tempe, AZ 85283

AZ Insurance Team is an Arizona Insurance Broker offering Home insurance, Auto insurance, Life insurance, and Commercial Insurance in Tempe, Phoenix, Chandler, Gilbert, Mesa, Scottsdale, Ahwatukee, Glendale, and everywhere else in Arizona. We also do insurance in California, Oregon, Washington, Colorado and Texas.

© 2017 by AZ Insurance Team LLC all rights reserved

September 27, 2019

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Term vs. Whole Life Insurance

December 27, 2018

 

Life insurance is an important step in investing for your future, but weighing your options for life insurance may be confusing if you don’t know the differences between them.

 

Term life insurance is a straight forward option where the policyholder pays premiums regularly and the beneficiary receives the death benefits when the policyholder dies, as long as the policy is still in effect.

 

Term life insurance is often considered the easiest and most affordable type of life insurance to buy as it does not involve any additional fees or maintenance.

 

“Term” refers to the period of time that you purchase your policy for. With term life insurance, you can choose to hold your policy for a certain amount of time such as 5, 10, 15, or 30 years. For this reason, term life insurance can also be purchased as a stand in for a permanent life insurance policy and can easily be converted to a whole life insurance. Term life insurance is often a good option for people expecting to build wealth over time and won’t require a financial safety net when they are older. Before your policy’s term has expired however, the policy must be renewed in order to not lose value.

 

On the other hand, whole life insurance is permanent and will stay in effect as long as the policyholder continues to pay the premiums. Whole life insurance includes a cash value, which acts as a savings account. This means that your premium payments are split between the death benefit and the cash value.

 

It usually takes around 12 to 15 years to build up a decent cash value but when you do, you can use the cash value to take out a loan, use the money for retirement, or use it to fund the policy. Over time, the cash value will overtake the death benefit.

 

Whole life insurance is a more expensive option than term insurance as the premiums are higher. Whole life insurance can end up saving you more money in the long run but often times people buy too little coverage or surrender their policy early because they cannot afford it.

 

If you’re considering buying or changing your life insurance policy, give us a call and we’d be happy to discuss your options.

 

AZ Insurance Team
480-535-5709
https://www.azinsuranceteam.com

*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.*

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