Term or Cash Value Life Insurance: Which is better?

Term Vs. Cash Value Life Insurance

When shopping for life insurance, the number of options available to you can be overwhelming. What’s equally if not more important is not only understanding the options, but also understanding which option is the best fit for you, your family, and your business. To learn which is the best fit, you first need to know what your end goal is or what kind of benefit you are looking for. To better determine the best fit for you, we want to highlight the core differences between Term Life Insurance and Cash Value Insurance.

1. Term Life Insurance
   • Term life insurance is very straightforward: Your choices are limited to the coverage amount and the duration of time that you need the coverage. With this coverage, you make your regularly scheduled premium payments and, should you pass within the term of the policy, your beneficiary will receive the death benefit. If not, your coverage will simply end and you part ways with the plan. Consider this the if/then coverage, if you need it then it’s there and if not then it goes away.

1. Cash Value Insurance
   • In comparison, Cash value life insurance, often called permanent insurance, is life insurance that you pay a consistent premium on throughout your life. Some situations allow you to fund a cash value policy so that the cash values may be used later in life to pay future premiums. As It may seem, this policy continues to stay in effect as long as you continue to pay your premium regardless of age or health. When you pay your premium, a portion of the payment is placed into a cash-value account.

Simply put, term life insurance is for the short term while cash value, or permanent, is for the long term. Consider term life insurance if you have a particular situation or scenario coming up that you want to be prepared for whereas cash value or permanent life insurance is for your long term life insurance planning. If you have additional questions, The Bailey Group (TBG) is here to assist you with your insurance needs.

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This article was originally approved for use in 02/2020 as AGE 151210 and certain information presented may have changed. For more current information please contact a financial professional with The Bailey Group.