Term or Permanent Life Insurance?

Life insurance policies come in two basic types: term life and permanent life. Learn more about the difference between the two to help you decide on a policy.

Permanent Life Insurance

If you are undecided about what type of policy is right for you, the good news is you can use our site for quotes on the best term life insurance rates or permanent life rates. There are two main differences between permanent and term life insurance policies. For one, permanent life insurance offers a lifetime of protection with premiums that never increase. So, though you might get the best term life insurance rates initially, a permanent life policy might be cheaper in the long-run. Secondly, permanent life insurance accrues cash value over time, so your beneficiaries will receive a death benefit plus the cash value of the policy. You can also borrow against or withdraw from this cash value to help you meet your financial goals. In general, a permanent life policy will receive more tax breaks than a term life policy. If you have any more questions please visit our FAQ page.

Good Candidates for Permanent Life

Before you shop for the best term life insurance rates, you want to make sure that a permanent life policy isn’t the better option for you. Permanent life is ideal for people who:

1. Need a lifetime of insurance protection
2. Would like the favorable tax treatment of a permanent policy
3. Would like to accumulate cash value to pay for retirement, education, or other goals
4. People who can afford slightly higher premiums in the short-run
5. Need a lifetime of insurance protection
6. Would like the favorable tax treatment of a permanent policy
7. Would like to accumulate cash value to pay for retirement, education, or other goals
8. People who can afford slightly higher premiums in the short-run

Pros & Cons of Permanent Life

In deciding whether to apply for the best term life insurance rates or permanent life rates, consider these pros and cons of permanent life policies:

1. Permanent life is more affordable in the long-run because premiums remain the same
2. Access your cash value when you need it for withdrawals or loans
3. Get tax-favored treatment of cash value and loans
4. Even if you cancel the policy, the cash value is yours to keep
5. Initially more expensive than term life
6. Loans and withdrawals will reduce the amount of the death benefit
7. If the policy lapses, is canceled, or surrendered, you might have to pay taxes on the cash value