Roughly one in every 200,000 Nigerians has a life insurance policy. They take out these life insurance policies to help protect their families in the event of a death. If you’re planning to take out your life insurance policy, you need to know that you have two different options: term life insurance and whole life insurance. To help you choose which of these life insurance options is right for you, you’ll need to know more about each one. Let’s look at what to know about term life vs whole life insurance policies.
Term Life Insurance
A term life insurance policy is a very straightforward kind of insurance that doesn’t come with many bells and whistles. This policy promises a death benefit to a specified beneficiary if you pass away during the life insurance policy period.
This type of insurance only lasts for a certain amount of time. That time can be as short as five years or as long as 30 years. After that term is up, the policy expires, and you have to buy a new one.
Term Life Insurance Benefits
When it comes to term life insurance benefits, there are plenty you’ll enjoy. Here are a few of the most notable benefits.
- More Affordable: The major benefit of term life insurance policies is that they’re usually much cheaper than whole life insurance policies. So if you just want to protect your family members after your death, these are the easiest and cheapest policies to take out.
- Serves as a Safety Net: Many single parents take out term life insurance policies to protect their kids until they become adults. They’re a great safety net to help ensure that the child grows up provided for.
- Easy to Understand: On top of the above, term life insurance policies are much easier to understand. You’re less likely to get locked into a contract you don’t understand if you take out a term life insurance policy.
Whole Life Insurance
Another type of life insurance is whole life insurance. This type of insurance is much more permanent than term life insurance.
Whole life insurance never expires, as long as you make your premium payments. Additionally, it also provides cash value and your death benefit, which can provide funds for your beneficiaries.
Whole Life Insurance Benefits
There are tons of benefits of a whole life insurance policy. Let’s examine a few of the major benefits of these plans.
- Annual Interest: Another benefit of whole life insurance policies is that providers give an annual interest rate. These pay dividends that help boost the total amount of money your policy is worth.
- Cash Withdrawals: One significant benefit of whole life insurance policies is that you can withdraw from the cash value at any point in time. This amount of money grows on a tax-deferred basis and can be used to invest in college tuition or house repairs if the needs arise.
- Tax-Free Withdrawals: Better yet, your withdrawals from the plan are tax-free. You just have to pay income tax on any earnings you make, thanks to investments from the withdrawals.
Take Out a Life Insurance Policy Today
Now you know the difference between term life vs whole life insurance policy and their benefits -each one makes a great choice and whichever is better for you, depends on your preferences and needs.
Are you ready to get started with your own life insurance policy? Here at Leadway Assurance, we offer a pre-priced and affordable Term Life Plan that cost only N10,000 yearly with up to N1,000,000 in benefits. Looking for something else? Request a callback today.