An astonishing 40% of Americans report living paycheck to paycheck, and 77% of these do not have enough savings to cover one month’s expenses.* The death of a family member without life insurance can leave a family in a financial crisis.
Life insurance allows your loved ones to receive financial help with mortgage payments, debt, education and everyday living costs. If you’re looking for a way to protect your family should the unthinkable happen, you may be faced with a decision between term or whole life policies.
Explore the pros and cons to determine the solution best fits your needs and goals.
While both types of policies provide death benefits, they function quite differently.
| Term Life | Whole Life |
| Lower cost | Higher cost |
| Expires after a specified time | Permanent coverage (as long as you pay premiums) |
| Guaranteed death benefit amount (unless you outlive the policy) | Guaranteed death benefit amount (but it could be reduced if you withdraw or borrow from the cash value and don’t repay it) |
| No cash value | Builds cash value |
| Simple policy | More complex policy |
| May offer conversion to whole life at the end of the term | May include a provision to borrow against the policy or make a withdrawal |
Term life coverage generally offers a lower monthly premium than permanent policies and provides a guaranteed death benefit payout if you die within the policy period. It can provide valuable, affordable protection for your loved ones who depend on you for everyday living expenses and can help provide for child care, education, debts and funeral costs.
Whole life offers lifelong coverage and combines a death benefit with a cash value component. This cash value grows over time, providing a valuable financial resource that can be accessed for various needs, making it a versatile and stable financial instrument. Plus, as long as your policy is active, there’s a guaranteed death benefit payout.
Deciding which policy type is best for you involves careful consideration of your financial situation, goals and needs. As you compare term and whole life policies, you may ask yourself the following questions:
At GuideStone®, our vision is that every servant of Christ finishes well. We care about your financial security in every stage of life, whether you’re buying your first life policy or experiencing major life events. For more information, contact us at Insurance@GuideStone.org or 1-844-INS-GUIDE (1-844-467-4843), Monday through Friday, from 7 a.m. to 6 p.m. CT.
GuideStone welcomes the opportunity to share this general information. However, this article is not intended to be relied upon as legal advice.
*Forbes.com/advisor/credit-cards/survey-living-paycheck-to-paycheck
Article
• Jul 11, 2024 