Affordable Life Insurance Protection for Your Family

Permanent Life Insurance vs Term Life Insurance

Understanding The Key Differences

What is the Difference Between Term and Permanent Life Insurance?

Term Life Insurance vs Permanent Life Insurance

Term life insurance is for people who need short-term life insurance protection for a period of 30 years or less.

Term life insurance might be ideal for you if you have a need for a large amount of coverage on a small budget. With term life you can choose coverage for 10, 15, 20, 25, or 30 years.

Whereas, permanent life insurance offers life insurance coverage for your entire lifetime.

Permanent insurance may build up cash value inside the policy over time. However, permanent insurance costs 5 to 10 times more than term life insurance

Which Type of Life Insurance Policy Meets Your Needs?

The term versus permanent life insurance debate has been going on for years. There’s no one right answer for everyone. Each of us has our own specific needs that life insurance provides for. Term and Permanent Life Insurance each have their own advantages and disadvantages. 

Term Life Insurance

Term life insurance is designed to help people buy life insurance protection they need when they can't afford to purchase all permanent insurance, or when they only need life insurance protection for a specific period of time. Term insurance provides you with a guaranteed death benefit.

The life insurance premiums may increase at pre-determined intervals such as 1 year, 5 years, 10 years or 20 years. This depends on the type of term life policy you select.

The most popular type of term life policy is Level Term.

Level Term Life Insurance offers coverage with premiums that never increase and coverage amounts that never decrease during your policy term for a duration of up to 30 years. 

A term life policy is often the choice when your life insurance protection needs are higher for a period of time, then drop down to lower levels in later years, such as when your children are grown up and on their own.

Term insurance can also be an effective way to provide supplemental coverage in addition to permanent insurance during years you need higher levels of protection, such as when your family and other financial responsibilities are beyond your current income.

In these situations, term coverage allows you to purchase important death benefit protection without going beyond your budget.

Also, if the coverage is convertible (the coverage can be "converted" to a comparable permanent life insurance policy, without the need to provide evidence of insurability), you can get the coverage you need today — with the ability to purchase permanent insurance coverage in the future.

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Permanent Life Insurance

Cash value or Permanent life insurance is often the best long term solution for many people.

Permanent life insurance provides you with lifetime insurance protection, provided you pay your premiums. Usually, once you’ve been approved for coverage, your policy cannot be canceled by the insurer. Regardless of your health, the insurance will remain in force.

Permanent insurance can eliminate the potential problem of future insurability. Cash value life insurance policies do not expire after a certain period of time.

And, some policies contain guaranteed purchase options, which allow you to buy additional life insurance coverage at specified times, regardless of your health.

Cash Value Life Insurance builds cash value within the policy.

This amount, part of which is guaranteed under many policies, can be used in the future for any purpose you wish.

If you choose, you can borrow cash value for a down payment on a home, to help pay for your children's college education, or to provide income for your retirement.

Note: Borrowing cash value from your permanent life insurance policy requires the payment of loan interest and will affect your total policy values.

Also, if you decide to stop paying premiums and surrender or cancel your permanent insurance policy, the guaranteed policy values are yours.

When purchasing life insurance coverage, or renewing or converting a term policy, look at more than just the premium. Consider the financial rating of the insurance company. Consider your long term goals and need for protection.

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Additional Resources:

Term Life Insurance vs Permanent Life Insurance

Life Insurance for Seniors Age 50 to 85

Life Insurance for Adult Children

Life Insurance Cost Calculator

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