What Is The Difference Between Term And Permanent Life Insurance?

Life insurance is a crucial investment for anyone who wants to ensure that their loved ones are taken care of in the event of their death. There are two main types of life insurance: term and permanent. Understanding the difference between the two can help you make an informed decision.

Term Life Insurance

Term life insurance provides coverage for a specific period of time, usually 10, 20, or 30 years. If the policyholder dies during this time, their beneficiaries receive a payout. If the policyholder lives past the term, the policy expires and there is no payout. Term life insurance is similar to renting an apartment – it’s a temporary solution for a specific period of time.

Cheaper premiumsNo payout if the policyholder survives the term
Simple and straightforwardNo cash value
Flexibility to choose the term lengthDoes not provide coverage for the entirety of the policyholder’s life

Term life insurance is a good option for those who need coverage for a specific period of time, such as when they have children who will depend on their income until they are grown.

Permanent Life Insurance

Permanent life insurance provides coverage for the policyholder’s entire life. This means that as long as the premiums are paid, the policy will never expire. In addition to providing a death benefit, permanent life insurance also has a cash value component that accumulates over time. Policyholders can borrow against or withdraw from the cash value while they are still alive.

Provides coverage for the policyholder’s entire lifeMore expensive premiums
Cash value can be borrowed against or withdrawn fromMore complex than term life insurance
Can be used as a financial tool to build wealthPolicyholders may be tempted to rely too heavily on the cash value component

Permanent life insurance is a good option for those who want lifelong coverage and the flexibility to use the policy as a financial tool.

Choosing the right type of life insurance can be a complex decision. It’s important to speak with a financial professional to determine which type of coverage is best for your individual needs.

Burial Insurance Rates
We Sell Burial Insurance
  Cash Payout On Death
  Cash Value (Savings) While Living
...Without The Hassle
 NO Waiting Period
  NO Medical Exam
  NO Expiration
 NO Rate Increases