If you are trying to decide between term and whole life insurance, knowing which type of policy is better for your needs can be difficult. While each has its own benefits and drawbacks, understanding the differences between the two types of policies can help you make an informed decision that fits your financial situation and personal preferences. If you’ve ever wondered what is term life insurance and how is it different from whole life insurance, read on to learn the benefits and drawbacks of each option.

What is Term Life Insurance?

Term life insurance provides protection for a specified period of time, usually 10-30 years. It pays out a guaranteed death benefit if the policyholder passes away during that period.

The key benefits of term life insurance include:

1. Low cost: Term life insurance policies are more affordable than whole life policies and allow more coverage for a lower premium.
2. Flexible terms: With term life insurance, you can choose between short-term or longer- term coverage periods, making it an ideal solution for individuals in different stages of their lives.
3. Financial protection: Term life insurance provides financial protection for your family in the event of your death during the specified term period, helping to ensure that their financial security.
4. Cash value growth: Unlike whole life insurance, which offers cash value growth over time, term life does not offer any investment component (though some insurers offer riders with such features).
5. Tax advantages: Premiums paid on term life insurance are generally tax deductible and can be used as a tool for estate planning and other tax strategies.

What is Whole Life Insurance?

Whole Life Insurance offers lifelong coverage and builds up cash value over time. The cash value feature makes this policy more expensive than term life, but it can also provide additional benefits, like the ability to borrow from the cash value.

The key benefits of whole life insurance include:

1. Guaranteed Death Benefit: Whole life insurance provides a guaranteed death benefit for your beneficiaries, regardless of any changes in the market or your health status.
2. Cash Value: Whole life insurance policies build up cash value over the course of the policy accessible either through loans or withdrawals without tax implications.
3. Forced Savings: Whole life insurance forces you to save money over time by requiring annual premium payments to keep the policy in force, helping to develop a savings habit as well as providing financial security to you and your family.
4. Tax Benefits: Whole life insurance policies may also provide tax benefits, including being able to deduct premiums paid from taxable income and having no taxes due on death benefits received.

• Accessibility: Whole life insurance policies are usually accessible for individuals who have difficulty obtaining other types of coverage due to age or preexisting conditions, and they tend to stay in place until death, regardless of health issues that may arise over time.

How to decide which is best for you

When deciding between term life or whole life insurance, you should consider several factors, such as your financial needs and goals, the cost of the policy, and the length of coverage.

For example, if you are looking for an affordable option to provide temporary coverage in case of death or disability, term life insurance may be best for you. Term life insurance offers a fixed amount of coverage for specific periods of time (such as 10, 15, or 20 years). During these years, premiums are typically lower when compared to those offered for whole life insurance.

On the other hand, if you want to build long-term financial security through cash value accumulation and other exclusive benefits offered by permanent plans (whole life insurance), this type of policy may be a better choice. Whole life insurance covers you until age 100 or more and usually has higher premiums than term policies. The premiums you pay also accumulate cash value over time that can be used as loan collateral if needed.

Bottom Line

When it comes to selecting a life insurance policy, there are several factors to consider. Term life insurance and whole life insurance both have advantages, so make sure to research each type of policy thoroughly before making a decision. Pay attention to term life insurance rates and any cash value benefits offered by whole life policies to choose the best coverage for you and your loved ones.

Coverage is underwri†en by American Family Life Assurance Company of Columbus. In New York, coverage is underwri†en by American Family Life Assurance Company of New York.

68000 series: In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100‐A68400. In New York,

NY68100‐NY68400. B61000 series: In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Virginia, Policies ICC0965JTO & ICC0965JWO. B60000 series: In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series: Whole: In Arkansas, Policy

Q60100CAR. In Delaware, Policy Q60200M. In Idaho Policy Q60100CID. In Oklahoma, Policy Q60100COK. In Oregon, Policy Q60100COR. In Texas, Policy Q60100CTX. Q60000 series: Term: In Delaware, Policies Q60200C. In Arkansas, Idaho, Oklahoma, Oregon, Texas, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C.

Aflac Final Expense insurance coverage is underwri†en by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. The life insurance policy

described herein contains an optional Accelerated Death Benefits Rider that is intended for favorable tax treatment under Section 101(g) of the Internal Revenue Code. Aflac does not give legal or tax advice.

Please consult with a qualified legal, tax, and accounting advisor before engaging in any transaction. In AR, AZ, ID, OK, OR, PA, TX and VA: Policies ICC21‐AFLLBL21 and ICC21‐AFLRPL21; and Riders ICC21‐

AFLABR22, ICC21‐AFLADB22, and ICC21‐AFLCDR22. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).

Receipt of accelerated death benefits may affect eligibility for public assistance programs. Benefits may also be taxable, and are not expected to receive the same favorable tax treatment as other types of accelerated death benefits that may be available.

This is a brief product overview only. Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations and exclusions. For complete details, including availability and costs, please contact your local Aflac agent.

Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.  

WWHQ | 1932 Wynnton Road | Columbus, GA 31999

NY | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211

Z2300711 
Exp. 6/24

Senior PR & Corporate Communications contact: Angie Blackmar, 706‐‐392‐2097 or ABlackmar2@aflac.com