What is the difference between term and permanent life insurance?

Term life insurance is a type of life insurance that provides coverage for a limited period of time and pays out a benefit only if the insured person dies during the term of the policy. Permanent life insurance, on the other hand, provides lifelong coverage and builds cash value over time. Term life insurance is typically the less expensive option, as it requires lower premiums over the life of the policy with no cash value. With term insurance, the policy holder pays premiums for a predetermined amount of time, usually 5, 10, 20, or 30 years. If the policy holder passes away during that time, their beneficiaries are paid out the death benefit. Once the term is up, the policy expires and does not pay out a benefit. Permanent life insurance is more expensive than term life insurance and covers the policyholder for their entire life. Permanent life insurance also builds cash value, meaning that if the policyholder surrenders the policy, they can receive a portion of the cash value. Additionally, if the policyholder needs to borrow money for an approved reason, they can take out a loan against their policy. In summary, the main difference between term and permanent life insurance is the amount of time the policy covers and the added cash value feature. Term life insurance is typically less expensive but offers no cash value, while permanent life insurance covers the policyholder for life and builds cash value.

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What is the difference between term and permanent life insurance?

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