Choosing Between Whole Life and Term Life Insurance | HSBC

Which Life Insurance Plan is Better For My Family?

You may require one or more types of life insurance to meet your financial needs and goals. Two major categories of life insurance are term and permanent. Permanent life insurance has options including whole life, variable life, universal life, and single premium life.

Term life

Term life insurance provides a fixed amount of coverage, at a fixed premium, over a specific period of time or term (10, 15, 20 or 30 years). Because its premiums are generally lower, term life insurance is often the choice made by young families. If you die before the end of the term, your beneficiaries receive a lump sum equal to the amount of coverage you purchased. Term Life does not build up cash value. Coverage can often continue after the chosen period if needed, or can be converted to a permanent life policy.

Why would I need it?

Term life insurance coverage is best suited to wealth protection, especially during periods of increased risk and exposure, like when paying off a mortgage, replacing your income during child-rearing years or protection money that has been set aside for a child's college tuition. It can also benefit others who may depend on you for support, such as an aging parent.

What are the benefits?

Besides its generally lower premiums compared to permanent life insurance, term life offers you the flexibility to receive additional coverage if you need it, beyond any other life insurance you may have.

What else should I consider about term life?

Term life only lasts for the term you set or until you stop paying the premium. It accrues no cash value paid out at the end of the term, if you're still living.

Permanent life

What is permanent life insurance?

Permanent life insurance covers you from date of issue until the day you die, as long as you continue to pay your premiums. Permanent life can earn cash value as your premiums are invested. This helps you build wealth while also protecting it. And of course, it transfers and distributes your wealth efficiently to your heirs.

Why would I need it?

Because it never expires, permanent life can be used as the foundation of your overall life insurance plan for a variety of life stages and financial needs.

What are the benefits?

Permanent life insurance never expires and your beneficiaries can receive a lump sum payment when you die. Another benefit of many permanent life plans is the accrual of cash value over time, which can be borrowed against if needed.

What else should I consider about permanent life?

Permanent life policies tend to have higher premiums than term policies, and may offer less flexibility than term life for pricing and options.

Types of permanent life insurance

Whole, universal, variable and single-premium are all types of permanent life insurance. Each may be used for wealth accumulation, protection, distribution and transfer depending on your needs.

High quality and value

HSBC Insurance Agency continually evaluates a variety of insurance options from leading, top-rated carriers. Our broad access and well-established relationships enable us to offer quality coverage choices and cost-effective solutions. We'll help you decide how much and what kind of coverage is optimal for your needs.

Comparison chart – term vs. permanent life insurance
  Term life

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Permanent life

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Best for Wealth protection and transfer Wealth accumulation, protection, and transfer
Consider if You want protection today for a set period of time and prefer lower premiums You want protection for your lifetime and to build toward your long-term financial goals
Length of Coverage Usually 10,15, 20 or 30 years Lifetime
Benefit Type Fixed payout Fixed payout
Premium Payment Monthly, quarterly, semi-annual or annual Monthly, quarterly, semi-annual or annual
Premiums Go Toward Cost of policy only Cost of policy and the policy's cash value
Cash Value None Yes, a minimum guaranteed rate
Borrowing Options None Loans may be taken out against the policy's cash value

Investment and certain insurance products, including annuities, are offered by HSBC Securities (USA) Inc. (HSI), member NYSE/FINRA/SIPC. In California, HSI conducts insurance business as HSBC Securities Insurance Services. License #: OE67746. HSI is an affiliate of HSBC Bank USA, N.A. Whole life, universal life, term life and health insurance products are provided by unaffiliated third parties and are offered through Insurance Agents of HSBC Insurance Agency (USA) Inc., which is a wholly owned subsidiary of HSBC Bank USA, N.A. Products and services may vary by state and are not available in all states. California license #: OD36843.


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ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES ARE NOT FDIC INSURED ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES MAY LOSE VALUE

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