Term Life Insurance vs. Permanent Life Insurance: Which is Right for You?

When choosing a life insurance policy, you’ll need to decide between term life insurance and permanent life insurance. Here’s what you need to know about each type of policy:

1. Term Life Insurance

Term life insurance provides coverage for a specific period of time, such as 10, 20, or 30 years. If you pass away during the term of the policy, your beneficiaries will receive a death benefit. Term life insurance is typically less expensive than permanent life insurance.

2. Permanent Life Insurance

Permanent life insurance provides coverage for your entire life and includes a cash value component. The cash value grows tax-deferred and can be borrowed against or used to pay premiums. Permanent life insurance is more expensive than term life insurance.

So which type of policy is right for you? Here are some factors to consider:

• Your financial obligations: If you have significant financial obligations that will last beyond the term of a term life insurance policy, permanent life insurance may be a better option.
• Your age: If you’re young and healthy, term life insurance may be a good option since it’s less expensive. If you’re older, permanent life insurance may be more affordable since premiums increase as you age.
• Your investment goals: If you’re interested in building cash value and using your life insurance policy as an investment vehicle, permanent life insurance may be a good option.

In conclusion, term life insurance is a good option for those who need coverage for a specific period of time and want an affordable policy. Permanent life insurance is a good option for those who want coverage for their entire life and are interested in building cash value.