Posted by: Natasha Wilson

If you are in the market for life insurance you should be fully informed of your choices before purchasing a life insurance policy. It is important to know what options you have and to know the difference between a term life insurance policy and a whole life insurance policy. Knowing your options and these differences will help you choose the best life insurance policy for you.

The main difference between a term life insurance policy and a whole life insurance policy is the length of time you are covered. A term life insurance policy covers you for a specified number of years but a whole life insurance policy covers you for your entire life. If you only need life insurance coverage for a specific number of years, a term life insurance is a good solution for you. However, if you need to be insured for the rest of your life a whole life insurance policy is a better option.

Another big difference between term life insurance policies and whole life insurance policies is their investment potential. A whole life insurance policy offers a tax-deferred accumulated cash value which acts as an investment. If you want to invest using your life insurance policy, a whole life insurance policy will allow you to do so. If however you have other investments a term life insurance policy may meet your needs better.

Term life insurance policies and whole life insurance policies also differ in price. Term life insurance policies are usually cheaper than whole life insurance policies but whole life insurance policies usually fixed annual premiums. With a whole life insurance policy you wont have to worry about your rates increasing if your health begins to deteriorate. Term life insurance companies can raise your premiums based on your health and age so they do not offer the security of fixed payments.