When looking for life insurance, it’s important to find the best policy for your own unique needs. There are so many web sites offering online discount life insurance, so it’s a common mistake made by many, to end up with a policy that’s not suitable.

One of the questions that arise time and again is whether a term life policy or a whole of life policy is best, and what’s the difference between them.

Term Life Insurance & it’s Benefits:

Term life policies cover you a predefined term.

Term life insurance only offers protection for the duration of the mortgage, and is normally of no value when your mortgage is paid off.

Term insurance is also cheap, and can even become cheaper over time. There are also a number of different types of term life insurance to choose from as follows:

* The first is level term insurance, and it is the most popular type of cover. This policy has it’s premium costs locked in for the full term of the policy, so you pay the same amount each month for the entire term of the policy.

* The next form of term life insurance is escalating term cover. This policy can be more expensive, as you pay an increasing amount each year. However, the lump sum payable at death also increases. These are normally low cost policies, and are best suited to younger people.

* Next, we have decreasing term insurance, and in this type of policy monthly payments stay the same, although the amount of cover reduces each year.

* The forth type of term life insurance is what’s known as increasing term insurance. Here the lump sum payable at death increases each year. This increase in value of the policy is made up by increasing the premiums periodically over the years.

* The fifth and final type is known as convertible term insurance. It is a type of term life insurance that you can convert at a later stage into an investment vehicle. The value of the investment is normally based on your health when you originally took out the policy.

Whole of Life Insurance Policies:

A whole of life policy can be more complicated and more expensive than term life insurance. However, a whole of life insurance policy covers you up until the time of your death, providing that you keep paying your premiums!. The advantage of these types of policy is that your family could receive a considerable lump sum when you die.

Whole of life policies can be more expensive and more complicated than term life insurance. Also, the investment you make can earn some interest each year. Therefore, since your investment generally grows each year, your premiums can actually reduce over time. You may also reach a time where the interest gained covers all the future premiums, which means you may have no more premiums to pay.

However, understand that it is possible that the final value of a whole of life insurance policy may not be the same as the amount of money invested in it over the years.

Summary:

The decision of whether to buy a term life policy, or whole of life cover comes down to your own unique needs, and circumstances, and what you wish to achieve.

The simplest form of life insurance is a level term policy with renewable option. This allows you to buy life cover for as long as you may require it.

However, you may prefer a policy that offers a growing nest egg, that pays out while you are still around to enjoy it!

Both types of policy have advantages and disadvantages, and that’s why it’s always a good idea to get advice from a competent insurance adviser.

Michael Pettigrew is an article writer for Best Insurance Quotes, a provider of quality cheap life insurance quotes. Visit Best Insurance Quotes to get a better life insurance quote

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