Permanent or Term Life Insurance | Which Is Right For You?

Permanent or Term Life Insurance | Which Is Right For You?

by Leslie Freeland, July 27, 2015

Do you know the difference between permanent or term life insurance?

 


“Out of all the questions people have about life insurance, the most frequently asked is whether they should buy permanent or term life insurance.”

A recent survey revealed that many people find life insurance confusing. In fact, 12% of the people surveyed had so many questions about what type of life insurance policy to buy that 8% of them gave up on buying life insurance.

Out of all the questions people have about life insurance, the most frequently asked is whether they should buy permanent or term life insurance. At Asurea, we want you to get the insurance you need now, which is why we are explaining, in simple terms, the difference between permanent and term life insurance. Depending on your personal needs and goals, either one may be right for you.

What is the difference?

Simply put, permanent life insurance is a lot like owning your own home. It’s yours for as long as you want it. You can own it for the rest of your life if you want to. No one can take it from you.

On the flip side, term insurance is a lot like renting a home. You’ll have coverage for the number of years that you want. This could be 5, 10, 20, or even 30 years – whatever number of years you select. After the term (number of years) has expired, your coverage ends.

Both policy types have their own unique benefits and features (including a variety of policy riders: add-ons that can enhance your coverage).

Here is a look at both in more detail:

Permanent Life Insurance

  • Coverage that lasts your entire lifetime

As long as you continue to make your premium payments, your policy will never expire.

  • Premiums that never increase

The price you initially pay will remain the same – no matter how long you have the policy or how your health changes.

  • Builds cash-value over time

Much like a savings account, the premiums that you put into your policy earn a guaranteed interest rate. That’s cash you can use in the future for a down payment on a home, college expenses, retirement or anything else you want.

  • Policy loans

The money that accumulates in your policy can be accessed by withdrawing cash or taking money out as a loan. You can borrow it anytime you want!*

  • Premiums are typically higher compared to a term policy

Because of its cash value features, you’ll pay a bit more initially for permanent life insurance. However, your premiums will never increase.

Permanent life insurance may be a good choice if you’re looking for lifetime protection that will allow you to “lock into” a level premium for life and provide you with a guaranteed rate of cash-value growth. Because it’s permanent, you won’t have to worry about the possibility of having to renew your coverage in the future based on your current age or health status.

Term Life Insurance

  • You select the term

How long do you need coverage – 5, 10, 20, or 30 years? The choice is up to you.

  • You can buy a lot of insurance for less money

Term insurance is typically less expensive than permanent insurance.

  • Level premiums that won’t increase

The low price you pay for your term life insurance policy will remain the same until the policy expires.

  • Some term life insurance policies have renewable options

You may be able to renew your existing policy when you reach the end of the term if your policy has a provision that will allow you to do so. If so, you may be required to take another medical exam and answer a new round of questions about your lifestyle, health status and family health history. Your new policy will then be based on your current age and any other findings.

  • The policy will eventually expire

When the number of years (the term) you want coverage has passed, your term life insurance policy coverage will end. If you find you need additional coverage, you’ll have to apply for a new policy based on your age and health.

  • It doesn’t have a savings element

Unlike permanent life insurance, your term life insurance policy doesn’t grow in value.

Term life insurance can be a great way to get the coverage you need at a low price. Whether you’re just starting out in life and money is tight or have a specific, short-term need for coverage, a term life policy can be the answer to getting the insurance you need at an affordable price.

The Asurea choice

To determine which one would suit your family best, contact Asurea today. We will look closely at your personal needs and goals and give you the information you want to make the right choice. And since we have access to over 40 of the nation’s top-rated insurance companies, we will not only find you the perfect policy, but we will find you that policy at the lowest price. Asurea is your Simple Solution when it comes to giving you the information you need to choose which type of policy is right for you.

*Any policy loans that are not paid back will reduce the face value of your policy. This will result in less benefits paid to your beneficiaries in the event of your death.

More Simple Solutions For You:

Asurea Insurance Services is the nation’s premier Insurance Marketing Organization that finds the perfect policy for your needs and budget. Asurea offers Mortgage Protection, Medicare Supplements, Final Expense, Retirement Solutions and Permanent Life Insurance.

Leslie Freeland

Leslie Freeland

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After obtaining her Master’s Degree from CSU, Sacramento, Leslie joined Asurea as the Marketing Communications Coordinator in February 2015. Since then, she has been working closely with insurance professionals to educate the public on the importance of life insurance and protect the public from common scams to be aware of, insurance and otherwise.
Leslie Freeland

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