When it comes to life insurance, there are two basic alternatives: term or permanent. Both provide you with protection and options to fit your needs and budget. You may want the affordability of our Versatile Term™ insurance, the lifelong protection and cash value of our permanent insurance products, or even a combination of both. Consider some of the differences to decide which is right for you.
- Length of coverage. Versatile Term™ provides coverage for a specific period of time, such as 10, 15, 20, 25 or 30 years and is designed for flexibility. Permanent insurance, which includes Whole life and Universal life, is designed to provide lifelong financial protection to you and your family as long as the policy is in force.
- Cost of premium. Initially, term life premiums are generally lower than permanent life premiums. However, term life premiums typically increase upon each renewal, while permanent life premiums stay the same.*
- Cash value. With most types of permanent insurance, there is a savings component known as cash value; the longer you pay into your policy, the more its cash value grows. You can choose to cash in or borrow against your permanent life policy and use the funds as needed. Term insurance does not accumulate cash value because it doesn’t have a savings component.
- Convertible policies. If you have a term insurance policy, you can convert it to a permanent policy. Permanent policies are not convertible.
- Death benefits. Both types of life insurance provide protection and pay a death benefit to beneficiaries. Term insurance claims will be paid only if the policy term has not expired when the insured person died. There is lifelong financial protection with permanent life insurance, so beneficiaries will receive the death benefit as long as the policy is in force when the insured person passes away.
*Universal Life premiums can change upon client request.