Term Life Insurance vs. Whole Life Insurance


Although term life insurance is a consumption type and whole life insurance has a saving function, not everyone is suitable for a whole life insurance.


Several Differences between Term Life Insurance and Whole Life Insurance:

1.Applicable to different groups of people

Term life insurance is suitable for the vast majority of ordinary and middle-class families to insure. As long as you have the plan to start a family, have normal debts, and plan to expect your children's education expenses, term life insurance is always applicable.

Using extremely low cost to transfer the heaviest financial burden at this age in life, until the mortgage is paid, the children grow up and work, the family responsibility on the shoulders is reduced, and there is no need for regular life insurance.

Whole life insurance is suitable for people who need to plan their estates in advance and is suitable for people above the middle class. Compared with other financial instruments, whole life insurance has the advantages of efficiency and certainty, leaving a certain amount of money for the beneficiary with less premiums and more money.


2. Different guarantee period

The protection period of term life insurance is very flexible. You can choose a period of 20 years, 30 years, or up to 60 years old, up to 70 years old, etc.; as long as it can cover some long-term debts and long-term family economic responsibilities. It is usually enough to cover the age of 60-65.

The coverage period of whole life insurance is not optional, it is guaranteed for life.


3. Different health notification and liability exemption 

The health notification and liability exemption of term life insurance are generally looser than that of whole life insurance, because the proportion of people who die before the age of 70 is smaller, and because many term life insurance can be directly insured online. the health notification and liability exemption are more relaxed. Therefore, some easing of health notices and liability exemption is conducive to gaining more market share.

Although the health notification and liability exemption of whole life insurance is stricter than that of fixed-term life, it is still very loose compared to critical illness insurance and medical insurance.  


4. Different cash value


Because term life insurance is consumption-based, the cash value itself is very low.

What is a high cash value policy good for?

It helps with policy loan.

Policy loans are especially suitable for policies with high cash value, such as whole life insurance and annuity insurance. Moreover, the loan interest rate of insurance companies is low, and the loan is not reviewed for purposes. The loan is fast, and the procedures are convenient.

While having a high net worth, you also have a very flexible cash flow to deal with various crises.


4. Same dissertation

Whether it is term life insurance or whole life insurance, is a simple tool to designate beneficiaries. Otherwise, if the beneficiary is designated by other means, a will notarized is needed. If there are any changes afterwards, we will have to head to a notary office for another notarization. The process is relatively complicated and troublesome.

Whereas, life insurance is very simple in procedure, the beneficiary can be changed at any time. 

For your beneficiary, you never need to ask others for opinions, you don't need others' consent, and you don't need to explain to others.

Leave love but not debt. ️

Of course, money appears to be useless to the passed ones, but it is essential to the living family.