Whole term life insurance provides for the family after the insured's death. Benefits are paid out to the family to provide income replacement. But whole term life insurance also provides the insured with an investment vehicle to provide some financing for life.

Function

Whole term life insurance means that the insured is covered for life. Unlike straight term life insurance, in which coverage is for a set period (for example, five, 10 or 20 years), whole life insurance builds cash value within the policy that can be used toward other investments, such as housing or education.

Costs

An insurance quote gives a better idea of the costs for each individual. Whole term life insurance costs more than straight term insurance because the policy is creating an investment portfolio as well as providing coverage in case of death. Over the long term, the costs are decreased if the dividends are sufficient to cover the premium's costs.

Time Frame

As the name of the coverage suggests, the policy covers the whole life of the insured. A healthy, active individual might find that whole term life insurance policy is more fiscally responsible, as there are no renewals at set intervals. The policy will be in effect for the insured's entire life.

Considerations

To decide if whole term life is the best coverage for you, consult a Series 66-licensed insurance agent. The agent should review your health, lifestyle and future financial needs to assist in your decision.

Whole Term vs. Straight Term

The debate continues over which policy is the best for everyone, but there is no easy answer--every person's needs are different. Although straight term coverage costs less in the short run, if the coverage expires, that money is gone. With whole term life insurance, the policy never ends unless canceled by the insured.

Source:

The Round Table

Insurance Information Institute