Life Insurance: Whole Life VS Term Life

We all must die one day, but the thought of not protecting our loved ones once we pass is a nightmare. Not only will the deceased love ones emotionally grieve their loss, but they also will be suffering financially. Thus, it is imperative to get life insurance to ensure this horrific scenario will happen. 

The main two types of life insurance out there is whole life insurance and term life insurance. Learning the differences between these types of life insurance will help potential insurers choose the right type of life insurance for them.

Term Life Insurance

This type of insurance has three primary components: The premium to be paid (the insured’s cost), the face amount of the death benefit (protection), and the term of coverage. If the insured person passes away within the term of coverage, a beneficial face amount is provided to the beneficiary. However, If the insured person dies after the end of the term, there will be no beneficial payment amount for a beneficiary. 

Whole Life Insurance 

Whole life insurance, however, is a type of permanent life insurance. So, the policy includes savings in addition to the insurance. A part of the insured person’s premiums is applied towards insurance, and the rest is invested in building a cash value. The insured is paid the cash value if the insured lives beyond the policy expiration. Also, the insured can use the cash value to borrow money. By investing the cash value in the money market or in stocks and bonds, there will be a gain. While the insured is still living and the policy is cashed, the gain will be tax-deferred. Nevertheless, the beneficially will obtain proceeds that are usually tax-free anyway if the insured dies. 

Other Important Factors

There are other factors to consider before deciding which type of life insurance is right for you and your loved ones. They are as follows: 

  • Term life insurance is much more affordable than whole life insurance. 
  • In the US, it can be much more difficult to get term life insurance if you are over 50 or 65. 
  • If you need life insurance with a term of fewer than 10 years, the most cost-effective insurance is most likely term life insurance. 
  • Whole life insurance is most likely the most cost-effective one for a term of more than 20 years. 

For more information about these types of life insurance, Wellspring Insurance Network the way to go. With over 10 years of experience, this insurance agency has been providing insurance relief in Frederick, MD, and surrounding areas for years. Wellspring Insurance Network Inc. is located in Frederick, MD, and they will be more than happy to assist you. Contact them now!

3 Reasons to Change Your Commercial Insurance Coverage

Your commercial insurance coverage ultimately has a lot to do with the success of a business in Frederick, MD. Unfortunately, this message isn’t ultimately one that’s discussed very often. When something does wrong, having someone to turn to can make the difference between surviving the storm and folding under the pressure. Wellspring Insurance Network Inc. wants you to know more about when you should change your insurance coverage. 

1. When Your Business Ramps Up 

The more customers you take on, the more employees you need. The more employees and customers you have, the more likely it is that something will go wrong. If your insurance was first taken out when you were still a one-person show, it’s time to expand your limits to get a little more from your policy. 

2. When Your Circumstances Have Changed 

Maybe you’ve moved your place of operations across town, maybe you’re taking on new territories, or maybe you’ve decided to adjust your target demographic. Major changes mean that your risks will be different. When you talk to your carrier, you’ll need to explain the situation to fully update your policy. 

3. When You’re Unhappy with the Carrier 

From unanswered emails to a poorly designed claims process, there are a number of reasons why you might be unhappy with a carrier. If you’re in Frederick, MD and want to learn more about a carrier that will really be of service, Wellspring Insurance Network Inc. is here to help. Our staff makes it easy to update your coverage, and we’ll even provide the advice you need to make better decisions for your overall business. Give us a call today to find out more about how we structure the policies for business owners and give them everything they need to feel protected.