The term life insurance provides coverage for a certain term. Typically, you get coverage for 10, 20 or 30 years only. Your policy will terminate at the end of the term that you chose. You then have the option to renew your policy once your term ends but there is a setback to this for the premium rates that you’ll have to pay will be increased by then due to your advanced age. It is thus important that you strategically plan how long you need this type of financial protection for your family. Bear in mind that you are protected only as long as you are enrolled and paying the premium. Term life insurance will require less premium amount to pay. This is so for the face value of your policy is only a death benefit. This type of insurance does not gain any cash value at all. You cannot borrow or cash out any money from it.
The whole life insurance, on the other hand, gives lifelong protection. The cost to purchase this type of insurance is very high. Your premium paid will be higher than the term life insurance, but there is an advantage that can be had from it for the premiums do not increase as you grow older. It is designed and priced in a manner that you will be able to easily maintain it for a longer period of time.
The beauty of the whole life insurance is that it gains cash values over time. The premium you pay into your policy gains interest so that you are allowed to borrow or withdraw money from it. You can then repay your loan and its corresponding interest by paying in installment or by lump sum. If you fail to pay, any remaining loan plus interest will be deducted from the payout at the time of death. But if the unpaid amount is larger than your cash balance, the whole life insurance will be terminated right away without any cash value.