What is the difference between term and permanent life insurance?

Term life insurance is a type of life insurance contract where coverage is provided for a set period of time, typically 10 to 30 years. The insured pays a fixed premium during the term of the policy and if the insured dies during the duration of the term, the beneficiary will receive the death benefit as a lump sum. Term life insurance usually does not have any cash value component, but there are some policies that do. Permanent life insurance is a type of life insurance contract that provides coverage for the entire lifetime of the insured. The duration of the policy is not set, so it lasts however long the insured is alive. Just like term life insurance, the insured pays a fixed premium each month and the beneficiary will receive the death benefit as a lump sum when the insured passes away. The main difference between term and permanent life insurance is the fact that permanent life insurance also has a cash value component associated with it. This cash value portion of the policy accumulates with interest over time and can be used for a variety of purposes, such as investing, retirement, and more.

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What is the difference between term and permanent life insurance?

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