Whole life and term life policies are two of the most common types of life insurance at Hanneken Insurance Agency Inc. They provide individuals in the Little Falls, MN area with financial protection in the event of their death. While both types of policies offer coverage for individuals, there are several significant differences between them that you should consider when deciding which is best for you.
The main difference between whole and term life insurance is the length of time that the policy remains in effect. Whole life insurance covers your entire lifetime, while term life policies only last for a predetermined amount of time (usually 10-30 years). Whole life policies also typically have a fixed premium rate, meaning your payments remain constant throughout the duration of the policy. On the other hand, premiums on term life policies are often lower because they expire after a certain period.
Another way these two types of policies differ is how they handle cash value accumulation. Whole life policies accumulate cash value over time, meaning you can borrow against it if needed and receive dividends from the insurer if premiums exceed costs. Term life policies do not accumulate any cash value and therefore do not offer this feature to policyholders.
When deciding between whole and term life insurance, it’s important to consider your budget and long-term financial goals. Both types offer valuable protection but come with different advantages and disadvantages depending on your circumstances. It’s important to speak with an insurance professional who can help guide you in making an informed decision about what type of policy best fits your needs.
For more information, call us at Hanneken Insurance Agency Inc. today. We serve the Little Falls, MN area.