The Benefits of Life Insurance: What You Need to Know
When it comes to financial planning, life insurance is an important consideration. It can provide security for your loved ones in the event of your death, and can also be used as a way to save for retirement or other major life events. There are many different types of life insurance available, so it’s important to understand the options and how they work. In this article, we’ll discuss the various types of life insurance and their benefits.
Term Life Insurance
Term life insurance is a basic type of policy that provides coverage for a specific period of time (the term). If the policyholder dies during this period, a death benefit will be paid out. Term policies are usually more affordable than other types because they have no cash value and do not build up any equity over time. However, once the term ends, there is no coverage unless you choose to renew.
Whole Life Insurance
Whole life insurance offers lifetime coverage with an accumulating cash value over time. This cash value can be borrowed against or used to pay premiums. Whole policies also come with fixed premiums that won’t increase over time; however, they tend to be more expensive than term policies.