I'm a 27 year old female looking to purchase insurance for myself and possibly my three year old child. Just wondering which of the three is a better option and which is a good company to purchase life insurance from. Thank you
Before you worry about company or even type of policy, decide what PURPOSE is to be served by the insurance. What are you seeking to accomplish?
It's rarely worthwhile to insure minor children. It's the PARENTS that need life insurance because they have family members financially dependent on them – and that's the fundamental purpose of life insurance.
A level term policy will give you the most "bang for your buck" in terms of the death benefit amount. The drawback is that term policies are just that – in effect for a fixed term (it can be as long as 30 years). A whole life policy gradually builds a cash value and doesn't expire (as long as you pay the premiums), but the premium cost is much higher. "Final expense" policies are a waste – avoid them.
So, you walk into Home Depot, and you want to buy a tool. Which one is better, a saw, a hammer, or a screwdriver?
Life insurance is a financial tool. Before you can decide which one is the appropriate tool for the job, you have to define EXACTLY what the job is. What do you want the life insurance to DO for you? How long will you need it to do that job? The answers to those questions will tell you which type you need.
Regarding the difference, there are about a thousand websites that explain that – but the FIRST thing to do, is define the job.
Term costs less at first, but eventually it ends or the price goes up.
Whole costs more, but you can keep it as long as you want at the same price.
If you want to keep the insurance for as long as you live — even if that's 100 years — then whole is better.
If you want the insurance for only 20 years or so and don't plan to keep it any longer than that, then term is better.
A) Final expense is another name for life insurance. Sometimes people use the term to indicate a small whole life policy since it'll only cover your funeral costs, etc…
B) How much coverage do you want and how long do you want it for?
C) Whatever you buy, you can add a rider to that to cover your child. ~$60 a year usually gets $10,000 for ALL of your children.
Why would you buy life insurance on a 3 year old. If she has an unfortunate demise do you lose the house?