Choosing the right type of life insurance policy to protect your family is an important decision and deserves some time to consider all the options. Should you choose a term or permanent life insurance policy? Each type of policy has its own unique advantages. The right choice will depend on your personal financial needs and long-term goals.
Term life insurance
Term life insurance comes in specific year terms; 10-year, 15-year, 20-year, etc. The policy will only pay death benefits if you die within the term the policy is in effect. Rates are more affordable for a term life insurance policy as opposed to permanent life insurance. The younger you buy your term life policy, the more affordable the rates will be. After age 50, the rates for a term life insurance policy increase. Term life insurance is generally easy to qualify for and may be an option to consider if you are on a budget or are looking for a temporary life insurance solution until you can afford to purchase permanent life insurance. The good news is that many term life insurance policies can be converted into permanent life insurance at the end of the policy term.
Permanent life insurance
Permanent life insurance is just as its name implies–a life insurance policy that covers you for life. It is a more expensive policy to purchase than term life insurance. However, you have the peace of mind in knowing you have coverage for as long as you live as long as you pay your insurance premium. Not only does a permanent life insurance policy pay death benefits but you may also accumulate a cash value for the policy which you can borrow against in times of financial need. There are several different types of permanent life insurance, and the cash accumulation potential will vary based on the type of policy you purchase.
Still have questions about choosing term or permanent life insurance? We’ll be glad to go over all of your options!