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Reasons to Switch to a Whole Life Insurance Policy from a Term Life Policy
Many people make the assumption that all life insurance types are the same. They know that if they die with an active insurance policy, then that policy will pay out. This is true; both whole life and term life insurance will pay out if the insured party passes away during the lifetime of the loan. Since both types pay out, why would anyone want to switch from a term policy to a whole life policy? This question will be addressed in this article. The key word to remember for term life insurance is term. These policies are only active for a limited time, called the term. The term can range from 1 year to 30 years, but once that term is over the policy has to be renewed or the policy becomes void. If you are looking for coverage while you complete some family goals, term life insurance can be wonderful. Term life insurance policies come up lacking when they are considered as actual life insurance. Whole life is active for your entire life, as long as you stay current on your payments. Some additional benefits of whole life insurance policies are:
- Premiums can be reduced over the course of time.
- A maximum payment can be reached, after this payment there are no further premiums.
- Policies must be renewed every time they expire.
- Premiums rise whenever a policy is renewed. Your insurance company knows that you are older every time a renewal comes up and are therefore less likely to live out the remainder of the policy.