Term Life Insurance Explained

Unlike a whole life insurance policy which is meant to cover you for the rest of your life, a term life insurance policy covers you for a set period of time. Critics of term life insurance say that insurance companies make a most of their money from term life policies because they only pay out on 2% of the policies and the rest expire. On the other hand the premiums paid on a term life policy are just a fraction of what you would pay for whole life and you may only wish to be covered for a set period of time anyway, for example you may wish to be covered only until your house is paid off or the kids graduate from college.

Another benefit of whole life over term life insurance is that a whole life policy will increase in value, it is an investment. While some other experts say you are better of with term life insurance and taking the amount saved by paying smaller premiums and investing it yourself for higher returns. An argument can be made either way as to which is better whole life or term. Ultimately that is a decision you will have to make for yourself but below are a couple of videos by people making an argument for term life insurance.