Term vs. Permanent Insurance
Term Insurance covers you for a specific period of time--for a term (generally up to 30 years). Because they only cover the insured for a finite period, people often use them as focused protection: during the years that you'll have mortgage payments or until you put your children through college. Term policies are less expensive than Permanent Policies because they tend not to offer cash savings and you won't be building equity.
The Insurance Information Institute likens Term Life Insurance to buying a home: "just as many people rent (while saving to buy a home), individuals who need insurance protection now, but have limited resources, may purchase term coverage and then switch to permanent protection. Others may view term insurance as a cost-effective way to protect their family and still have money to put into other investments."
Permanent Life Insurance (also called "universal life" or "whole life")
Unlike Term Life Insurance, Permanent Life Insurance provides long-term financial protection as they tend to offer cash savings in addition to a death benefit. Of course, with the additional benefit, the monthly premiums will be higher--but you'll be building equity with this long-term financial plan.
We are not affiliated with any of the establishments listed on this site. The advice on this site is based on our own experiences and those of other visitors who have contributed. We imply no guarantee, and the research here should NOT be taken as professional advice. Disagree or have something to add? Email us! This is a community-based site--feel free to contribute or link to us if you found it useful!
© 2004 HotInsuranceHints.com