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Term Life vs. Whole Life? 10 Life Insurance Questions to Ask

July 06, 2018
Our goal is to educate and advise on life insurance options, so you can feel confident in making the right choice, whether that’s through Quotacy or somewhere else. To ensure we provide accurate and trustworthy information, our writers follow strict editorial standards.

If you’ve decided to get life insurance, you may have some questions about choosing between term life and whole life insurance.

Of course, as the saying goes—you don’t know what you don’t know. So, we’ve taken the liberty of answering the 20 most frequently asked questions about term life vs. whole life that you might ask before getting a quote for your insurance policy.

1. Term life vs. whole life: what’s the main difference?

Yes, there is a difference—the biggest being how long your coverage lasts. Term life insurance provides coverage for a specific time period (a term)—usually in increments of 10, 15, 20, 25, 30, and 35 years.

A whole life policy provides coverage for your entire life.

» Learn more: The Differences Between Term and Permanent Life Insurance

2. What are the pros and cons of term life vs. whole life?

It depends on your objectives.

The affordability of term insurance is a big plus for most people: term life insurance premiums are a fraction of the cost of those for whole life. Plus, as the name implies, term policies can be purchased in terms and amounts that meet your needs at various stages in your life.

For example, you may purchase multiple policies of differing amounts to cover your children when they enter college and a different amount to protect your spouse when you’re ready to retire.

However, if you have a loved one with special needs who will always need your support, then whole life insurance may be a good choice for you, as it will provide permanent protection for your loved ones throughout their lives.

Finally, term life, unlike whole life insurance, doesn’t accumulate cash value over time (that you can withdraw or borrow against)—if this is important to you then a whole life policy might be a better option for you.

These are just a few pros and cons of each type. As I mentioned, the first thing to do is establish your goals and reasons for seeking a life insurance policy.

For most people, term life insurance provides the income protection and financial security they seek for the what-ifs in life.

3. Do I have to be elderly to get life insurance?

You can get life insurance as soon as you are legally able to sign a contract—that’s age 18 in most states.

As with anyone, the insurance company will approve your application if you are an acceptable insurable risk and able to prove financial justification for the coverage amount (face value of the policy) that you wish to buy.

While there is no perfect age to buy life insurance, your mid-20s is a great time to start learning about how to build a secure financial future for yourself with life insurance, an emergency savings account, and a Roth IRA, for example.

4. Why should I care about life insurance if I already have a will?

A will is definitely a must—it decides who gets your money and tangible assets, such as your car, home, or other personal property (Aunt Millie’s prized Japanese tea set, for example) and hopefully keeps everyone from arguing about inheritance issues after your death.

» Learn more: What Is a Will?

When you get life insurance to supplement your other estate planning, you are protecting the people you love from negative financial impact—be it the loss of your income or inheriting the debt connected to your estate.

A life insurance policy provides a death benefit—funds that will help alleviate the financial burden that your passing may cause—to your beneficiaries.

Since term life insurance premiums are so affordable, it’s possible that, for well under your monthly mocha java budget, you could provide excellent coverage for your family—leaving them with their inheritance intact and the proceeds of your policy ready to cover any unexpected costs.

5. Do I have to be married to name my domestic partner as my beneficiary?

No marriage license required. You can name anyone as your beneficiary, with one caveat.

Your beneficiary should have an insurable interest in you—meaning that your passing will impact them financially. After the policy is inforce, or active, you are able to easily change your beneficiaries, if you wish.

6. My medical history isn’t that great and I’m deciding between a term life or whole life policy. Do I have to choose a no medical exam option?

Not necessarily.

Term life insurance companies don’t only offer affordable coverage to the young and super fit. It is possible that, even if you have had issues in the past, you may be able to get a great policy for a premium that is within your budget.

Our advisors are experienced in helping applicants with medical challenges find the coverage that they need, regardless of their smoking status, past illnesses, or other health issues they may have experienced in the past.

7. I’m in a same-sex marriage. What, if any, are the restrictions on our ability to get life insurance?

Today, same-sex marriage is legal in all states.

Most of the best insurance companies offer policies to all married couples, regardless of each partner’s gender.

8. I’m a single parent looking at the pros and cons of term life vs. whole life insurance. How should I choose?

It depends on your individual circumstances, of course, but for most single parents term life insurance is the best choice.

It provides great coverage at a price most parents can afford on a single income. If you have a special needs child or a loved one who will require lifelong care, then a whole life policy may be a better option for you.

See what you’d pay for life insurance

Comparison shop prices on custom coverage amounts from the nation’s top carriers with Quotacy.

9. Am I too old to get life insurance?

Even if you sent your last child off to college back when Google was just a cute sound babies made, you shouldn’t assume that you’re uninsurable. Some insurance providers work with applicants in their golden years.

Final expense life insurance is a policy that doesn’t require a medical exam and acceptance is guaranteed. If you’re interested in a small whole life policy to cover your final expenses and are 50 years or older, consider this type of policy as you make plans in your senior years.

We have several term life and whole life insurance options available for seniors.

10. I’ve heard that I have to undergo an exam for my life insurance application to be approved. Is that some sort of sports thing?

No, you won’t have to climb a rope or play dodgeball.

Life insurance companies and their underwriters need to determine their risk in insuring you, so some some life insurance carriers require you to answer questions about your health and undergo a simple medical exam—similar to a short physical (including bloodwork).

It’s best to prepare for your exam by limiting sugar, fat, and caffeine in your diet, getting enough rest, and fasting before your exam to make sure your insulin levels, heart rate, and cholesterol levels are normal.

Term Life vs. Whole Life Insurance: Questions You Should Ask When Making Your Choice

Deciding which type of policy to choose doesn’t have to be a daunting task. Here are five additional questions to ask yourself as you prepare to make your choice.

Will I always need the same amount of insurance coverage?

As we mentioned, term life policies may be laddered—or purchased for terms of different lengths and in varied amounts—to provide just the right amount of coverage as your insurance needs change.

With term life insurance you pay for only what you need for the timeframe that you require the coverage. For example, if you have only 10 years left on your mortgage payments, you can buy a 10-year term life insurance policy in the amount of your remaining loan balance. When your mortgage is safely paid off, your life insurance coverage is timed to end. So, you won’t be overinsured.

Do I have loved ones who will need to be supported throughout their lives?

If your child (or another loved one) will require special care throughout their entire lives, then you might want to consider a whole life policy. We have a wonderful article on how to financially protect a special needs child or set up a trust to take care of them using life insurance.

Do I have a medical condition which may limit my policy options?

The standards used to determine your risk class (an estimate of your longevity) vary by provider. It’s important to be honest on your application, so your Quotacy agent can find a company that can accommodate your special situation.

Underwriters look at many different things before assigning a risk class, so, even if you don’t think you qualify, you should apply. You may still be able to find excellent coverage even with a pre-existing condition.

Do I have significant debt that I want paid off upon my passing?

It’s important to include your consumer debts—in addition to household expenses, income replacement, and future expenses (such as college tuition)— when estimating how much coverage you will need.

» Calculate: Life insurance needs calculator

Have I compared policies and premiums from the best life insurance companies side-by-side?

To find the best policy, you need a clear view of all of your options.

While most captive life insurance agents will only be able to give you access to policies from certain companies, an online broker (like Quotacy) will help you see multiple coverage options for your family.

At Quotacy, we give you the tools (like our comparison quoting tool) to find a plan that will secure your family’s financial future. Start by getting your life insurance quotes today.


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