What is the difference between term and whole life insurance?

Term life insurance and whole life insurance are two distinct types of life insurance policies, each with unique characteristics that cater to differing financial needs and goals. Term life insurance provides coverage for a specified period, usually ranging from one to thirty years. If the insured individual passes away within this term, the policy pays a death benefit to the beneficiaries. However, if the term expires and the insured is still alive, the coverage ends, and there is typically no payout or cash value accumulated. This type of policy is often more affordable compared to whole life insurance, making it an appealing option for those seeking coverage for a limited time, such as to protect dependents during their formative years. On the other hand, whole life insurance offers lifelong coverage, as long as premiums are paid. In addition to providing a death benefit, this type of policy accumulates cash value over time, which grows on a tax-deferred basis. The policyholder can access this cash value through loans or withdrawals, providing financial flexibility. Whole life insurance tends to be more expensive than term insurance due to its lifelong coverage and cash value component. Ultimately, the choice between these insurance types depends on individual financial circumstances, needs, and future planning goals. For detailed information, individuals are encouraged to explore the NY Life Insurance website or contact their representatives directly.