Labor Day is upon us, which means it’s the month of September, which brings us back to the fact that September is Life Insurance Awareness Month. You know, when most people think about life insurance, they’re usually thinking about two different types of policy – either a term life policy, or a whole life insurance policy. Do you know the difference?

Term Life Insurance

My opinion is pretty straightforward and pretty cut and dry. Term Life insurance is just that – it’s only life insurance. You purchase the policy for a certain amount of time, and you have the life insurance for the length of that term, or that amount of time.

Most people consider a term life policy when they’re buying a house. Let’s say you buy a house for about $300,000; you have a 30-year mortgage on it, you then go out and you buy a 30-year term life policy for $300,000. In the unfortunate event that you perish during that term, the $300,000 is paid out, and that goes to pay off the mortgage on the house. There is no cash value at the end of the 30 years.

If you’re fortunate enough to live a long life and you live past that 30-year term, the insurance just ends, and you walk away from the contract.

Whole Life Insurance

Whole Life insurance is a little bit different. Whole life insurance does have a savings component associated with it. Therefore, every time that you pay your premium, a certain amount of that premium will go to pay for the life insurance and a certain amount of that premium will go into an investment vehicle.

At some point during the term of that whole life policy, you’ll start to build up a little bit of a nest egg or a value or sum that you’re able to withdraw from. Some of them allow you to even take a loan against it. Again, in the unfortunate event that you do pass during the term of whole life insurance policy, the life insurance proceeds are in fact paid out.

But again, if you do live that long and happy life, and you live past the term of that whole life insurance policy, you will in fact have a nest egg that you can withdraw or take a loan from and spend any way that you want to.

One thing to keep in mind is that term life insurance policies are usually less expensive than a whole life policy. I hope this little bit of information helps you decide which type of life insurance is best for you.

It’s hard to believe it’s mid-August already. Pretty soon it’ll be September and fall will be here. Speaking of September, I want you to keep in mind that September is life insurance Awareness Month. It gives us all a good chance to sit back and review the changes that have occurred over the past year, and how those changes affect our life insurance coverage.

If you bought a new house, sold a house, had a new baby, maybe your oldest child went to college, or there’s several other situations that could impact the life insurance coverage, but certainly those ones just mentioned really do impact your need for life insurance.

Take a couple of minutes during the month of September and review your situation. If you have any questions with regards to life insurance, give me Don Ivol a call at 412-563-2106. I’ll be happy to review it with you.

In the meantime, don’t forget, take a couple of seconds and enjoy the last couple of weeks of summer. Whether you go golfing, go on vacation, or visit one of our lakes in Pennsylvania like I am. Everybody deserves to enjoy a couple weeks of rest and relaxation.