Comparing Life Insurance Term Permanent Plans
Which life insurance is right for you, Term or Permanent?
Well, that depends on what you want your life insurance policy to accomplish. So, you need to ask yourself, what is the goal of my life insurance?
If you need life insurance to provide short-term protection for 30 years or less, then a term life policy can help you accomplish your goal.
What is term life insurance?
Term life insurance is life insurance for a specific period of time, usually from one to thirty years.
How long does a "term" last for term insurance?
Most life insurance companies offer term life insurance lasting for a term of 5, 10, 15, 20, 25 or 30 years. Also, an annual renewable term life insurance policy lasts for one year and may be renewed each year for a higher premium.
With level term life insurance your rate is guaranteed to remain the same each year for the duration of your term. Also, the amount of life insurance coverage stays the same each year.
Term life is the lowest priced life insurance offering the most coverage at the lowest cost for a period of up to 30 years.
If you pass away during the term of your policy while coverage is "In Force", your beneficiary (you choose) will receive the death benefit proceeds from the life insurance policy, free from federal income tax.
If you are alive when the term of your term life insurance policy ends, your life insurance expires and no death benefit is paid out. One reason term life costs so much less than permanent life insurance is because many people outlive the duration (term) of their term life policy.
Why do people choose term life insurance?
Most people have a short-term need for life insurance, including to:
What is permanent life insurance?
Permanent life insurance is life insurance that lasts for your entire lifetime, no matter how old you are when you die. It builds cash value over time inside the policy from which the insured may take a loan.
The rate for your permanent policy is guaranteed to remain the same each year.
Why do people choose permanent life insurance?
Most people purchase permanent life insurance to provide guaranteed lifetime life insurance protection no matter when they pass away.
Some common reasons for choosing permanent life insurance include:
What type of life insurance is cheaper?
If you need life insurance for a period of 30 years or less, term life insurance is much cheaper than permanent life insurance.
Can I buy both types of life insurance?
Yes, you can apply for and purchase a term life insurance policy and a permanent life insurance policy to meet your different life insurance needs.
Keep in mind, term life insurance plans usually provide a convertibility option which means you may convert your term life insurance policy into a permanent life insurance policy by a specific future date stated in your term life policy.
So, if you decide you need permanent life insurance at some point in the future after purchasing a term life policy, you may be able to convert it into permanent coverage at a higher rate based on your age at that time.
Compare Life Insurance Rates
Top Pick – JRC Insurance Group
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Highly Recommended – United of Omaha
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Additional Life Insurance Resources:
Life Insurance Calculator – Find out how much life insurance you need.
Top Life Insurance Carriers – Review a list of the best life insurance companies in America.
Life Insurance Medical Exam – Learn what to expect with a medical exam and how to prepare for best results.