What is the difference between term and permanent life insurance?

Term life insurance is a type of insurance policy that provides financial coverage for a specified period of time, usually one to thirty years. It pays out a lump-sum death benefit if the policyholder passes away within the specified term. In contrast, permanent life insurance provides coverage for an entire lifetime, as long as the premiums are paid. This type of policy also accumulates cash value over time, which can be accessed through policy loans or surrendered for cash. In California, term life insurance policies are often cheaper than permanent life insurance, but the coverage benefits are much shorter. Also, term policies do not build any cash value or other savings components. Permanent life insurance, on the other hand, includes cash value accounts that grow tax-deferred. Policyholders can access the cash value of their policy by taking out policy loans or surrendering the policy for cash. To sum up, term life insurance is a type of policy that provides temporary financial coverage, while permanent life insurance provides lifetime coverage and includes a cash value component. These two types of policies serve different purposes and can be useful to meet different financial needs.

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What is the difference between term and permanent life insurance?

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