Whats the difference between term, convertible term, and whole life insurance?
Whole life insurance, the most traditional form of “permanent” insurance, can be kept in force for as long as you live. The face amount and the premium (the amount you pay for protection each year) are fixed at the time you buy your policy and stay the same even as you age. The policy’s cash value grows at a fixed rate of return specified in the policy and can be used as collateral to borrow against your policy. While permanent insurance is usually recommended as the core of an insurance strategy, term insurance is good for people who need coverage for short periods of time — younger families, say, who need large amounts of protection for one year, five years, or more. Lower premiums at younger ages increase as policyholders age and renew their policies. Benefits are paid only if death occurs during the period covered. If you stop paying premiums, the insurance stops. “Convertible” term policies can be exchanged for permanent insurance without a medical examination, but with a higher
