Life InsuranceYou might have heard the rumor that a whole-life insurance policy is better than a term policy. In some cases, this might be true. However, in others, term life insurance has special benefits that you might not fully realize. Therefore, don’t rush to convert a term life policy to a whole. Here are a few reasons that term policies might better suit you.

Term Policies Cost Less

A term life insurance policy lasts only for a set number of years. For example, many people buy 20-year policies that offer payouts of several thousand dollars in case they die. You might also choose a 10-year policy, or even one for a shorter term. However, the policy should last at least as long as you provide income to your family. Making it last even longer is usually a great benefit, however.

Because of their temporary status, term policies tend to cost much less money than a whole-life policy. They also don’t carry as much risk, and often have a few less investment perks. Nevertheless, your overall death benefit can remain stable. Therefore, you’ll still get the main perks of life insurance for a lot less cost.

You Have a Lower Risk of Policy Losses

By buying term coverage, you might even reduce your risks of policy lapses. In most cases, you can renew your policy (often automatically) when the term ends. Furthermore, since you’ll often pay less for your coverage, you’ll have a lower risk of missing payments and losing coverage.

They are Convenient

You only have to keep a term policy for the length of the term. Therefore, if you want to drop coverage after the end of the term, you often can. However, we don’t recommend you doing so. Instead, ask your agent if you can reduce or increase your payout limits. That can help the policy better fit your current financial needs.

You Still Can Invest

You might think you want whole life coverage because of its investment incentives. However, just because you can’t invest using a term policy doesn’t mean you cannot invest. Sometimes, the returns on whole-life policies don’t prove what you want to see from your investments. However, investing on your own terms might prove more responsible. Therefore, if you decide to cancel your life insurance, you can keep your investments alive elsewhere.

Term life insurance is a great, affordable coverage option for millions of Americans. It can usually provide significant protection without a lot of cost risks. However, it still might not be the best fit for you. Therefore, talk to your life insurance agent if you have better qualifications for term- or whole-life coverage.

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