The basic difference between term and permanent life insurance is this: A term policy is life coverage only. In permanent life insurance policy, as long as one continues to pay the premiums, the policy does not expire for a lifetime. As the name applies, permanent life insurance provides coverage for the whole life. Permanent life insurance policies build up a cash value (usually beginning after the first year). With permanent life, you pay a fixed premium for life instead of the increasing premiums found on renewable term life insurance policies. In addition, permanent life insurance has a cash value feature that is guaranteed. In term and permanent, the full premium must be paid to keep the insurance.
Advantages of a Permanent Life Insurance Policy Include:
- Interest accumulated through the investment portion of the policy is tax-free until withdrawn.
- Irrespective of your age or health, the amount of life insurance premiums remain fixed.
- Permanent Life Insurance can also be used to create tax-deferred savings for retirement.
- Helps to manage ongoing, future and uncertain family expenses.
- Helps fulfill the financial obligations of the family/dependant in case of death of the person insured.
- Allows borrowing against the cash value.
- The policyholder can cancel or surrender the permanent life insurance policy at any time and receive the cash value.
If you are thinking of building a cash value then yes, permanent insurance is a good investment. Speak to our agent and he will be happy to assist you in any manner whatsoever.
To compare quotes, simply click life insurance quotes and you will be taken to a page that asks you to complete a form. If you’re unsure of how much coverage you need, or how long the term should be, connect with one of our knowledgeable representatives immediately. You can also send us an email or call our licensed agents at 1-800-521-7873.
Find out more about the differences between term insurance and whole life insurance and the advantages below: