Whats the difference between whole life and term life insurance?
A. These are the two main forms of life insurance you should understand. (It’s also good to learn about universal and variable, which are variations of whole life insurance.) With term insurance, you’re covered only during the life of the policy, while you’re paying the premiums. If you carry a term life insurance policy for 50 years, regularly pay the premiums, and then quit paying and die a year later, you’re out of luck. (Well, you’d be out of luck regardless — but, in this case, your beneficiaries are out of luck, too.) There are several forms of term insurance: • With level term, you pay a fixed premium for up to 20 years. This can be a good deal, as it protects you against the effects of inflation and unexpected changes in your health that would warrant higher premiums. • Annual renewable term gives you the option of renewing your policy regularly, but at increasing premium rates. • Decreasing term policies feature a steadily decreasing death benefit. This might seem undesirable
