Learn the basics of term and permanent life insurance, so you can have an informed conversation with a licensed insurance professional.
Life insurance is a contract with an insurance company that is generally designed to provide a death benefit to your beneficiaries. The two broad categories are term life insurance and permanent life insurance — each is built for different goals, budgets, and time horizons.
Term life insurance is generally designed to provide coverage for a specific period of time, such as 10, 20, or 30 years, at a level premium for that term. It typically does not build cash value and is generally the most budget-friendly way to get a larger death benefit, which is why many families use it to cover a mortgage, income replacement, or child-rearing years.
Generally the most affordable way to get a meaningful amount of coverage
Coverage lasts for a set term, matched to a specific need such as a mortgage or income-replacement period
Some policies may offer the option to convert to permanent coverage, depending on the product and carrier
Coverage generally ends at the end of the term unless renewed, converted, or extended, depending on the policy
Features, availability, and pricing vary by product and carrier and are subject to underwriting. Not all products offer all features described above.
Permanent life insurance is designed to provide coverage for your entire lifetime. In addition to providing a death benefit to your beneficiaries, many permanent life insurance policies can also build cash value over time, which may be accessed during your lifetime through withdrawals or policy loans.
Permanent life insurance may be used for long-term family protection, legacy planning, tax-advantaged cash value accumulation, business planning, or retirement income strategies. Because these policies are designed for long-term needs, it is important to review the cost, benefits, risks, and flexibility before deciding if it is the right fit.
Common types of permanent life insurance include whole life and universal life, among others. Each type works differently, and features vary widely by product and carrier.
Coverage that may last for your lifetime, as long as premium requirements are met
The potential to accumulate cash value over time, which may be accessed under certain policy terms
Flexibility for certain planning needs, such as estate planning or supplementing other financial goals
In some cases, the ability to adjust premiums or death benefits, depending on the product
Features, availability, and performance vary by product and carrier and are subject to the terms of the policy contract. Not all products offer all features described above, and any potential cash value growth is not guaranteed unless specifically stated in the policy contract.
Term life insurance is generally designed to provide coverage for a specific period of time, such as 10, 20, or 30 years, and typically does not build cash value. Permanent life insurance is generally designed for lifetime coverage and may include a cash value component. The right choice depends on your individual goals, budget, and circumstances, and is best discussed with a licensed insurance professional.
Are you looking for coverage for a specific period of time, or for your lifetime?
Is building potential cash value a priority for your financial plan?
What is your budget for ongoing premiums?
Do you have estate planning or wealth transfer goals that permanent coverage may help address?
Request a quote and a licensed insurance professional can help answer your questions. There's no obligation to apply.
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