Term Vs. Permanent Insurance
Simply put, with Term Insurance you buy coverage for a set period of time, typically 10-30 years, and if you die during that time, your beneficiaries/family would receive a lump sum payout.
Permanent Insurance on the other hand provides a payout regardless of timeframe to your loved ones when you pass away, but also builds up a savings component over time called cash value, which you can access while you’re alive. This cash value has potential for growth.
Term Life Insurance
Provides insurance for a specific period of time, typically 10, 20 or 30 years.
Typically more affordable with lower premiums, making it accessible to many.
Ideal for covering temporary financial obligations like mortgages, debts, and children’s education.
Does not build a cash value, so premiums are solely for coverage.
Offers straightforward death benefit protection.
May be convertible to permanent insurance without a medical exam.
Works best for those looking for maximum coverage for a defined period at a more affordable cost.
Permanent Life Insurance
Offers lifelong coverage, ensuring beneficiaries receive a payout regardless of when the policyholder passes away.
Typically has higher premiums, but a portion goes toward building cash value.
Accumulates cash over time, which can be borrowed against or withdrawn in some cases.
Provides both death benefit protection and savings or investment component.
Often come in variations like universal or indexed universal life.
Can be used for estate planning, funding retirement, or leaving a legacy.
Appeals to those looking for lifelong coverage and potential growth within the policy.
Effective for estate planning scenarios.