Term Life versus Whole Life
After you determine how much coverage to purchase, next consider what type of plan you should purchase. Essentially, two types of life insurance plans exist: term life and whole life. Depending on your situation in life, one or both of these types of plans might be beneficial to your beneficiaries. Weigh each type carefully because doing so can greatly affect premiums and the eventual cash payout upon your death.
Term life insurance in Florida plans are typically purchased by individuals going through big changes in life – such as young parents wanting to have insurance during the years they are raising children, entrepreneurs who are just starting a business or newlyweds who might have significant debt. These policies typically are issued in five year increments with some having the possibility to convert to a whole life policy.
Alternately, whole life insurance plans are typically purchased by individuals who want full coverage for their entire lives because term life policies run out after so many years. After a term life policy expires, no death benefit is paid out if you are still alive. No cash accumulation is available with a term life policy either, whereas it is with a whole life policy. Furthermore, some whole life plans might even offer dividends that essentially increase the plan’s overall value. Allowing for withdrawals, whole life plans can supplement retirement income or be available during times in your life when you might need extra money.