The difference between term life insurance and full life insurance can be reduced to cost and duration. Term life insurance is cheaper than full life insurance and covers you for a certain period of time. Full life insurance usually lasts a lifetime and can generate cash value, making it a more complex and expensive product. While term insurance is ideal for temporary needs, full life insurance policies are a long-term solution.
Both types of coverage can work together. A fixed-term policy is a good idea until you've raised the kids or paid your mortgage. However, a whole life insurance policy, such as burial insurance, can ensure that your burial and other final expenses are covered. Term life insurance is a better option if you're looking for an affordable life insurance option that offers a financial safety net for a specific number of years of work, such as years of paying off a mortgage.
Comprehensive life insurance generates cash value and costs a little more, and remains in effect throughout the life of the insured as long as the premiums are paid. If you're looking for lifetime coverage without the high cost of a full life insurance policy, consider guaranteed universal life insurance. Comprehensive life insurance is a form of permanent life insurance that stays in effect as long as you make your payments. Variable life insurance doesn't allow you to adjust your premium payments, like universal variable life insurance.
These supplemental life insurance policies typically have smaller death benefits and generally shouldn't be your only life insurance coverage. Let's look at the positive and negative aspects between term life insurance and comprehensive life insurance. Term life insurance policies usually include a “temporary life conversion” option that allows you to convert the policy into a permanent life insurance policy. However, some people need life insurance for their entire life and want the guarantees offered by a full life insurance policy.
While it's more complicated than term life insurance, the way comprehensive life insurance works is simpler than other types of permanent life insurance. Term life insurance and comprehensive life insurance are insurance policies that allow you to leave a cash benefit for your beneficiaries after your death. If all you're looking for from a life insurance policy is to be able to protect your family when you die, then term insurance is probably the best option. Universal life insurance is a type of permanent life insurance that can offer cash value, if that's your priority.
All of the best life insurance companies sell term life insurance, so it's easy to find and compare life insurance quotes online. If you want life insurance to replace your salary for the 15 years until your youngest child goes to college, you don't need the high costs of full life insurance.