Most of your friends or colleagues might have told you that they got a good insurance policy through online. Quite naturally you also would like to follow them and ask for a life insurance quote. You will receive quotes of different policies that could confuse you a lot.  Hence, before asking for a life insurance quote on line, first know about various types of policies available. This only can help you choose one that will suit your personal needs. 

Life insurance is divided into the following main and sub-categories:
• Temporary
o Term life insurance
• Permanent 
o Whole life
o Universal life
o Limited pay
o Endowment policies

Of these, term life insurance and whole life insurance are the most popular.  If you have a comparison of study of whole life vs term insurance, you can understand the similarities and differences between them. Both policies primarily meant for providing protection for your loved ones when you die.  However, specific details like price and value of the policies are quite different.

So, let us make a comparison based on some key factors.  This will help you understand the two types of policies a little better.  When you compare their values, whole life insurance will gain value over the period of the policy.  This is because part of the money paid as premiums will earn dividends and interest depending on where the insurance company invests them.  This is the cash value portion and the other portion is the death benefit.  The cash value portion can be borrowed and used for emergencies.

Term life insurance does not have this cash value portion and you only get the face value of the premium amount that you have paid.  Since whole life insurance has a cash value, it costs more than life term policy.  Since whole life is permanent policy, the premium will not change throughout the life of the policy.  A term life insurance costs less but when the term is over, it is possible that the insurance rate can increase.  If you take a level term policy, then the rate will remain the same for the entire period.  

However, if you want a low cost life insurance, you must take a term life insurance when you are young and in good health. You must attend a complete medical exam and if the test results prove that you are healthy, you can get insurance at low insurance rates. As far as the period is concerned, whole life insurance will continue for the entire life of the individual or if the policy is canceled for some reason whereas a term life insurance is taken for specific periods of time. Usually this period varies from 10-30 years although the annual renewable term life insurance is taken for one year at a time.

The main drawback with term life insurance is that the policy will be null and void if the person outlives the policy.  This is a possibility for if a person of 30 years takes a term life for 30 years, the likelihood of him living beyond the age of 60 is very high. To prevent loss of premiums, insurance companies offer policyholders the option of renewing their policy once the term is over or to buy a new policy.  This will definitely result in higher rates since the individual will be older and could have developed some medical condition.

Both term and whole life ask the policy holder to undergo a thorough medical exam and the rates will be based on these results. Those who are reluctant to undergo medical test for any reason, they can opt for no medical exam term life insurance or whole life.  This policy just requires the applicant to answer a few medical questions. It is quick to process but will result in higher insurance rates.

As far as payout guarantees are concerned, whole life includes face value and a death benefit payment.  Term life insurance on the other hand gives only the face value to the beneficiaries.  Now that you know about these two main types of insurance policies, you can make an informed decision and go for one that will suit the long term needs of your family.

Article by David Livingston of EQuote, who is a specialist in everything life insurance. For more information on term life insurance for seniors and life insurance online, visit his site today.