The Catholic Association of Foresters offers two basic types of life insurance: Whole Life and Term Life. There are significant differences between the two; deciding which makes most sense for you may depend on your age and other circumstances:
Whole Life is permanent life insurance. With Whole Life, your coverage, premium rate, and death benefit amount are locked in, as long as your policy is in force, regardless of your age or health. Over time, the policy may accumulate cash value, which can be borrowed against or used to finance education or retirement.
Fixed rate payment:
As there are different types of mortgages, there are different ways of paying for Whole Life insurance. The Foresters offer one-time payment, twenty-year payment, payment until the age of 80. All of our Whole Life insurance plans have premium rates based upon the latest standard mortality table. Whole Life policies offer choices to meet a wide range of needs and to provide flexibility.
Cash value:
The cash value of Whole Life insurance is similar to the equity that builds up as a home owner makes mortgage payments.
Cash surrender:
As a home owner can sell a home for its cash value, a person insured with Whole Life insurance is able to “sell” the insurance by surrendering it for its cash value.
Automatic premium loans:
Through a loan, the Whole Life insurance policy’s cash value can be used to pay premiums, in much the same way a home owner can borrow against the equity of the home.
Benefits of Term Life Insurance
Temporary protection:
Just as an apartment lease is in effect for a fixed period of time, so is a Term Life insurance policy. For example, you can elect to be insured for a 20-year period or longer.
Renewable:
Just as a landlord permits the apartment lease to be renewed, in most cases, a Term Life insurance policy can also be renewed.
Low initial payments:
Renting an apartment is often the only affordable choice for some people. The same holds true for insurance: while Term Life insurance can initially provide more protection per premium, your premium increases each time the policy is renewed, because the risk of death increases with advancing age. At some point, as with apartment rent increases, rising premium rates make ownership a better choice.
Convertible:
Just as apartments can be converted to condominiums and an apartment renter becomes a condominium owner, Term Life insurance can be converted to Whole Life insurance.
No cash value:
When a person rents an apartment, that person does not build equity. The same holds true for Term Life insurance; it does not build cash value the way Whole Life does.
To learn more about which type of insurance is right for you. Call toll free 1-800-282-2263
