What is the difference between term and permanent life insurance?
Term life insurance provides you with coverage for a specific period of time. It pays a benefit only if you die during that term. Some term insurance policies can be renewed at the end of the period. Premium rates may increase at each renewal date. Because term insurance premiums are generally lower than permanent insurance premiums, you can usually afford a higher level of coverage. Term insurance is good for responsibilities that will diminish or end over time, for instance, mortgages or car loans. Permanent insurance is designed to be a lifelong policy and is known by a variety of names. As long as you pay the necessary premiums, the death benefit will always be there. These policies are designed and priced for you to keep over a long period of time. In addition, permanent life insurance policies can build cash value over time. This is money that can be borrowed against and, in some cases, withdrawn to help meet future goals. Please note that accessing your cash value may reduce the
Term insurance provides you with coverage for a specific period of time. It pays a benefit only if you die during that term. Some term insurance policies can be renewed at the end of the period. Others give you the ability to reenter. Premium rates will increase at each renewal date or each reentry. Many policies require you to provide evidence of insurability at reentry in order to qualify for the lowest available rates. Because term insurance premiums are generally lower than permanent insurance premiums, you can usually afford a higher level of coverage. Term insurance is good for covering responsibilities that will diminish or end over time, for instance, mortgages or car loans. Permanent insurance is designed to be a lifelong policy and is known by a variety of names. As long as you pay the necessary premiums, the death benefit will always be there. These policies are designed and priced for you to keep over a long period of time. In addition, permanent life insurance policies can
Term insurance provides you with coverage for a specific period of time. It pays a benefit only if you die during that term. Some term insurance policies can be renewed at the end of the period. Others give you the ability to reenter. Premium rates will increase at each renewal date or each reentry. Many policies require you to provide evidence of insurability at reentry in order to qualify for the lowest available rates. Because term insurance premiums are generally lower than permanent insurance premiums, you can usually afford a higher level of coverage. Term insurance is good for covering responsibilities that will diminish or end over time, for instance, mortgages or car loans. Permanent (or cash value) insurance is designed to be a lifelong policy and is known by a variety of names. As long as you pay the necessary premiums, the death benefit will always be there. These policies are designed and priced for you to keep over a long period of time.
