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Are you still choosing a side in the Houston TX whole term life insurance debate? There are differences between the two of them, each of which could be a point of contention. Whether or not you choose either side will depend on what you want for yourself and your family. Both insurance plans are designed for different purposes, and neither is a one-size-fits-all plan.
If you’re having trouble deciding which is the best course of action, get in contact with an insurance agent. Contact us at Best Life Insurance Houston Agency. The experts with our agency will be more than happy to help you with any questions.
What Are Term And Houston TX Whole Term Life Insurance?
The only way to know how each type of insurance plan could work for you is to learn more about them.
Term Life Insurance
Term life insurance is the simplest type of insurance to understand among the many. These plans protect you for a set amount of time, or a term if you will. Depending on the policy, it could be anywhere from a year to a couple of decades.
If you don’t pass during the term, your coverage ends, and no one receives money. Of course, that’s the best-case scenario.
Often called “pure life insurance,” this type of plan is designed to protect your dependents in case of premature death. If you die during the term, your dependents will receive the death benefit tax-free.
Usually, term life policies are the most affordable of the various types of life insurance. You can get a significant amount of coverage that would better fit your budget. Most term policies’ death benefit amount and premium payments will stay the same throughout the term. With these policies, you won’t have to worry about increasing prices or lower death benefits.
In most cases, even after your term expires, you’ll still have the option to get permanent life insurance afterward. Of course, by that time, it might be more expensive since you’ll be older.
However, unlike permanent life insurance plans, term life plans don’t have a cash value. In other words, you won’t get anything out of this plan other than the death benefit.
Whole Life Insurance
Whole life insurance is more complex than term life insurance, but it’s still the simplest type of permanent life insurance. This type of insurance will protect you for the rest of your lifetime. Once you die, your dependents will receive the death benefits, regardless of how old you are when you pass.
These types of insurance plans are typically more expensive than term life plans. Like with most term plans, your death benefit and premium amounts are fixed. They shouldn’t change throughout the policy, even if they’re a bit pricer.
Due to its price, whole life insurance plans offer several more benefits on the side other than the guaranteed death benefit amount. The most significant fact is that these plans have a cash value.
Every time you pay the premium, a portion of it goes into the policy’s cash value. The cash value will increase over time based on a pre-determined interest rate. Later, you’ll be able to use the cash value to take out a loan or draw from it for retirement.
If the cash value aspect of whole life plans interests you, you should check out other permanent life plans. Insurance plans like universal life insurance or variable life insurance have similar features, but they accumulate cash value differently.
Now it’s time to explain the Houston TX whole term life insurance debate. There are a bunch of differences between the two types of life insurance. The easiest way to explain it is temporary versus permanent life insurance.
The Blue Corner: Term
In one corner, there’s term life insurance. Say you only need coverage for a set period, maybe until your family won’t require you to provide for them anymore. Perhaps you want to make sure your family is protected until the house is paid off, or you want to make sure your spouse has a safety net in case of your death. Or maybe you want the cheapest life insurance available to you, and you don’t mind that it won’t last forever.
If you fall into one of those categories or something similar, term insurance could benefit you. Most term policies can go up to 30 years and can cover the period of those situations. They’re a great way to supplement permanent insurance during high-need years.
Not to mention, sometimes, these plans are also convertible. That means that before it expires, you can change it to a plan that’ll suit you better at that point in your life. However, not all plans are convertible, so be sure to take note of that.
The Red Corner: Whole
In the other corner, there’s whole life insurance. Say you don’t mind the higher pricing so long as you’re protected for the rest of your lifetime, however long that may be. Or perhaps you just wanted to use whole life plans’ other benefits to your advantage, like using the cash value as a supplementary retirement fund later.
If either one of those resonates with you, perhaps whole life insurance could be for you. Permanent life insurance plans are designed to protect you for a lifetime, and all of them can accumulate cash value.
The cash value of whole life plans increases based on a fixed interest rate. And a portion of your premiums will also go into it, allowing it to grow at a steady pace. Of course, it’ll take a few years for it to build up.
However, once it does, you’ll be able to take it out as a loan or withdraw it. But you’ll have to be careful about doing so. If you don’t repay it, the death benefits may decrease instead.
Which Side Are You On?
Before you dip your hands in and make a decision, you should consider your situation first. At that point, you’ll want to compare each plan’s characteristics to what you’re able to afford and what you ultimately want to protect. When you’ve narrowed down your choice is when you should go find the most suitable policy. Contact the experts with Best Life Insurance Houston Agency regarding which side is better to take in the Houston TX whole term life insurance debate.
Houston, TX Fun Facts:
- Despite rough waters early on, today Houston is one of the busiest port cities in the nation.
- Buffalo Bayou is a 53-miles-long river that passes through Houston and Harris County.
- There is a burping bubble—that’s right—in the Buffalo Bayou, underneath the Preston St. Bridge. It is operated by a nondescript red button in a tower on the bridge, just begging to be pressed.
- For more fun facts look here!