What is the difference between term and permanent life insurance?

Life insurance serves as a protection for a person’s loved ones in the event that the insured person dies. There are two main types of life insurance: term and permanent insurance. Term life insurance is a type of insurance that offers coverage for a specific time frame, such as 10, 15, or 20 years. If the insured person dies during that time period, the policy will pay out a lump-sum death benefit to the listed beneficiary. The cost of term life insurance is relatively low but the coverage only lasts for the specified term. Permanent life insurance, such as whole, universal, or variable universal life insurance, offers coverage for the insured person’s entire life. It is also a type of policy that builds cash value over time, which can be used by the policyholder during their lifetime. Although permanent policies are typically more expensive than term policies, they are worth the cost since they provide lifelong protection and can build a tax-deferred cash value. In Idaho, life insurance policies are regulated by state laws to ensure that policyholders receive the coverage and benefits they are entitled to under the policy. Idaho insurance law also requires insurance companies to obtain licenses from the Idaho Department of Insurance before offering life insurance policies.

Related FAQs

What is insurance law?
What is the difference between a contract and an insurance policy?
What is the standard of care for an insurance company?
What is the claim settlement process?
What is the difference between independent and captive insurance agents?
What is a claims made policy?
What is the difference between an insurance policy and a contract?
What are the risks of self-insuring?
What is the role of an insurance appraisal?
What is the process for making an insurance claim?

What is the difference between term and permanent life insurance?

Related FAQs

Related Blog Posts