There are two basic life insurance options: term and permanent. Term lasts for a specific, pre-set period. Permanent lasts your entire lifetime.
Depending on your needs, you may want the affordability of term life which is most often used for temporary, short-term needs like your mortgage. Or, you may prefer the lifelong protection and cash value that most permanent life insurance products offer.
Consider some of these key differences to decide which is right for you.
- Length of coverage. Our term life insurance provides coverage for 1-, 10-, 15-, 20-, 25- or 30-year terms, and it’s designed for flexibility. Permanent insurance, which includes whole life and universal life, is designed for lifelong financial protection, as long as the policy’s in force.
- Cost of premium. Initially, term life premiums are generally lower than permanent life. 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. All our life insurance products pay a death benefit upon the insured person’s death if the contract and term have not expired and are still in good standing.
Which is best for you?
If your main concern is affordability, term life insurance starts with the lowest monthly premium. Term Life 1 even offers a one-year, guaranteed-renewable term.
If you’re looking for the best overall solution for you and your family, the decision of term versus permanent doesn’t have to be an either/or situation. Often, the best choice is a combination of both types of insurance. The key is finding a solution that matches your duration and insurance needs.
If you have questions about life insurance, contact your local Financial Advisor. They’ll be happy to discuss your insurance needs and solutions. Have you considered finding your balance of life insurance and investments? Together they help provide complete financial security.
*Universal life premiums can change upon client request.