Understanding Policies for Term and Whole Life Insurance in Wichita, KS
The two main kinds of life insurance in Wichita KS are called term and whole life insurance. The first kind lasts for a specified length of time, or a term. The second lasts for the person’s entire life.
About Whole Life
Whole life insurance in Wichita KS pays out an accumulated cash value when the person dies. The premiums are substantially higher since this coverage is an investment that builds value over the years.
About Term Life
Term coverage is typically intended to pay for funeral expenses and family bills in case the person passes away earlier than would normally be expected. The premiums are low because, typically, there never is any payout. The policy ends at a specified date and the policyholder is still alive.
These policies last anywhere from one year to 30 years. People generally choose short-term policies if they want life insurance to protect their family but are somewhat strapped for cash. They can buy another policy the following year but cannot simply renew the previous one.
Making the Decision
The decision between these two products basically comes down to what the person needs and what he or she can afford for premiums. A third factor to consider is whether the person could essentially self-insure with other investments and choose term life to pay for the family’s immediate expenses in case of death. This depends on how much money the individual can invest and whether the return on those financial instruments at least matches what the whole life insurance policy would eventually pay out.
If they can afford the premiums, people often decide on a 20-year or 30-year policy as soon as they begin having children. It’s crucial to understand that the policy will be canceled if they cannot pay the premiums, and there is no accumulated cash value. Some term life policies can be converted to whole life at some point if the person eventually decides this would be a good idea.
An independent insurance agent can explain more details about these policies and help customers compare options from different companies. Visit Andywoodwardinsurance.com to learn more about one particular agency.