Reader’s Question:

Hello, I’m from Irvington, New Jersey. Please explain, why is it that term life insurance policy is cheaper than whole life insurance policy?

Nicole

Irvington, NJ

Hello there Nicole.
This is the common question for most people who are looking for their money’s value.

Bear in mind that “cheapest doesn’t always equivalent to the best option”. Term life insurance policy is cheaper compared to whole life insurance policy simply because term life insurance covers you for a limited period of time only. The coverage end up when the specified number of years is completed.

Compared to whole life insurance, term life insurance does not build up cash value. If you are going to surrender or terminate the life insurance policy you cannot get your money back. While a whole life insurance has a cash value, its insurance and at the same time also an investment that could give you cash equivalent in the long run.
These are the direct comparison between term life insurance and a whole life insurance. It is also the main reason why term life insurance is cheaper than whole life insurance.

To avail free quotes, you can go to websites that offer free quotes such as this one. It is as simple as filling out a form, and you will be given free quotes without any obligation. I suggest you do compare at least 5 rates from different companies before you buy any insurance from your area.