To many, the language on insurance policies might as well be foreign. The problem is, were never taught the ins and outs of life insurance. It certainly isn’t a subject taught in high school or college. However, having a sound understanding of life insurance is vital if you want comprehensive coverage for you and your loved ones.
What is the difference between whole and term life insurance? This is one of the most commonly asked questions. There are some important differences between the two. A term life insurance policy is one in which you buy a policy for a set amount of years (say 20 or 40) in return for a death benefit. If the policyholder passes away during the term period, the set beneficiaries receive the (death benefit) money. However, the money is tied up and cannot be used or added to once the term begins. Worst of all, if the policy expires before the policyholder dies, no money is paid out.
A whole life insurance policy is generally considered to be a smarter investment because it provides death benefits and cash value accumulation. This means that the policyholder can borrow from the cash value of the policy. Best of all, whole life policies cover the holder for their entire life — so long as the premiums are paid.
This simple and fast quiz will test your life insurance knowledge. By answering a few basic questions, you won’t only learn some things about life insurance, you might also discover possible policy changes that you should make.