Should You Get Whole or Term Life Insurance?

Should You Get Whole or Term Life Insurance?

Decide which insurance policy is right for your needs.  

Term life and whole life are two popular variations of life insurance policies. While the basic idea of providing cash in the event of your death is the same, there are some big differences between the costs and benefits of each one. To help decide which policy is best for your family, read on.


Term life insurance is certainly the lower-cost option. In a nutshell, when you buy a term life insurance policy, you are buying coverage for a certain amount of years, say 10 or 30 years. After this term runs out, policyholders have the option to review. If the policyholder does not die within the term, no death benefit is paid out. Term life insurance policies do not accumulate any cash value.

In most term life policies, the premium stays the same for the initial term. This is known as level premium, and the death benefit remains the same. In addition, there are some variations of term life policies, where premiums remain the same but the death benefit reduces every year.

Regardless of what form it takes, term life insurance is a cost-effective way to provide your family with temporary coverage.


Whole life insurance protects you for your entire life – in other words, it is permanent. Premiums tend to be higher than term life policies, not only to compensate for the higher mortality risk as you age, but because whole life policies accumulate cash value over time. Because of this, whole life insurance policies can be included in retirement planning. One significant advantage of whole life insurance is that the policyholder can borrow against the policy.

Whole life policies are great at providing permanent insurance coverage. It can also be useful as a savings vehicle that can be borrowed against if necessary.

Which policy is right for you will depend on your family, needs, and budget. For more information about selecting the right life insurance policy to suit your needs in Phoenix, Arizona, contact the team at American Premier Insurance. As life insurance experts, we’re able to walk you through the process of selecting the right policy to meet your needs.