Which is better and why: Term or whole life insurance?

Before investing in life insurance, it is important to consider the amount of cover you need, payment options and the claim process. Despite the flexibility of life insurance, making the decision on whether to purchase whole life or term life insurance can be quite a challenge.  

According to Windermere Insurance in Greenwood Lake, NY, understanding the features, advantages, and setbacks of each policy as explained below; will help you make the right choice based on your financial goals and the financial needs of your beneficiaries.

Term life insurance

Here, you pay premiums for a certain period and in return, your beneficiaries receive a specific amount of money on your demise.

Its advantages include:

·         The great value of returns since it can be purchased in large amounts for small premiums.

·         Matching terms to needs which provides protection and security to beneficiaries in the event of sudden death.


·         The policy is temporary and on expiry, one will be required to renew his/her policy which often involves a significant increase in premiums paid.

·         Your beneficiaries may never be paid the benefit if you outlive the term.

Whole life insurance

With whole life insurance, one gets the death benefit throughout his/her life with an additional cash value benefit that accumulates value over time.

Its advantages include:

·         Lifetime coverage whereby your beneficiaries will receive the benefit as long as the policy is in force.

·         Retention of a portion of your premiums which when sufficient enough, become available to you as a surrender value.

·         Depending on the company’s financial performance, the policyholder may receive dividends.


·         The initial premiums are always higher as compared to term life policy although, over time, they become more affordable.

From the above comparison, you probably will have a clear picture of the difference between the two policies. At Windermere Insurance in Greenwood Lake, NY, we will be of great help in assisting you to make a wise choice based on both the long term and short term insurance costs of the different life insurance policies, in relation to your age and the face value of each cover.