Choosing between whole life insurance or term life insurance is an important decision to make because your choice could affect the life of your family. Each of these types of life insurance comes with different risks, sacrifices, and benefits. Knowing the differences can be helpful for making that final decision and could potentially prevent negative outcomes for your family. If you ever encounter any major financial problems or bankruptcy along the way, consider talking with a Tennessee bankruptcy lawyer for assistance.
What Comes with Whole Life Insurance?
Tennessee whole life insurance comes with the benefits of coverage until you die and an increasing amount of coverage depending on the age you are in your passing. Compared to term life insurance, whole life insurance does not cease after a certain amount of time but continues to cover you until your untimely passing. This means there is no risk of your family not being covered.
The three main types of whole life insurance are:
· Traditional Whole Life Insurance. This type of whole life insurance offers a death benefit and premium that remains the same up until your passing. Your cash value account will increase with your age.
· Variable Life Insurance. The variable form of whole life insurance comes with the benefits of a savings account and the potential to increase your coverage, but the risk of decreased coverage if investments do not go well.
· Universal Life Insurance. The universal form of whole life insurance means your cash-value account will increase with interest and you can alter premium payments.
The cash value is unique to whole life insurance and allows you the benefit of a cash value that grows over time as you age. However, the risk of losing coverage happens when you fail to repay policy loans.
How Term Life Insurance Works in Tennessee
Tennessee term life insurance is cheaper compared to whole life insurance but is also temporary. This means your family may not be guaranteed coverage if the policy ends before you pass away. The way this usually works is you choose a term life insurance that lasts 10 years, 20 years, 30 years, or more. Either way, once the term life insurance period ends, you have to purchase a new term life insurance.
Term life insurance benefits are affordability, renewability, and the option to switch to a whole life insurance plan. Some negative aspects of term life insurance are no value increases, time-limited coverage, and health eligibility requirements. Eligibility requirements may mandate you to take a health exam.
Bankruptcy Attorney in Chattanooga, TN
Deciding between term or whole life insurance can be a difficult decision to make. If you ever have any concerns about your family’s financial future, then try reaching out to our lawyers in Chattanooga, Tennessee and North Georgia for legal advice on finances and bankruptcy. You can call Tom Bible Law at (423) 424-3116 to talk to a Bankruptcy attorney in Tennessee for a free consultation today. Our legal team of Tennessee bankruptcy lawyers is located in Chattanooga, Kingsport, and Tullahoma.