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TERM |
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WHOLE LIFE |
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Coverage: |
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Covers
you for one year |
Covers
you throughout your |
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then you renew if alive. |
life. |
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Premiums: |
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Lower |
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Higher |
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Value
of Policy After |
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Year
is Over: |
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Worthless |
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Builds
value as you age. |
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Age
Adjustments: |
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Insurance
company can |
Policy
actually increases in |
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decrease
coverage as you |
value as
you get older and |
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get older. |
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"death benefit" remains the same. |
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Guaranteed
Renewability: |
Check
policy. |
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Check
policy. |
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Strongly
recommend not |
Strongly
recommend not |
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buying
policy that does not |
buying
policy that does not |
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have guaranteed renewability. |
have guaranteed renewability. |
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Ability
to Draw Cash |
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from
Policy: |
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None |
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Can draw
cash while living or |
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can
borrow from cash value of |
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policy. |
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Incontestability
Clause: |
Typically,
two years. |
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Typically,
two years. |
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Beneficiary: |
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Must name
beneficiary. |
Must name
beneficiary. |
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Can
change beneficiary at |
Can
change beneficiary at |
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any time. |
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any time. |
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But if
you don't change, no |
But if
you don't change, no |
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change is assumed. |
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change is assumed. |
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Insurance
Company |
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Ratings: |
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Every
insurance company is rated by A. M. Best.
Make sure you |
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buy your policy from a highly rated company. You're counting on |
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that
company to pay your dependents, perhaps 30 to 70 years from |
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now. Therefore, you want a strong
company protecting your family. |
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