Permanent vs. term life insurance
Posted on May 9, 2008
Filed Under Basic Information, Guide, Helpful Facts | Leave a Comment
What is the difference between permanent and term life insurance and which one should you pick? Permanent life policies offer death benefits and a savings account while term life policies offer death benefits only. This means that in a term life policy, your survivors will get money at the incidence of your death provided that you die within the length of the policy. In permanent life policy, your survivors will get a death benefit plus if you’re still alive, you could get back the money by cashing in the policy or borrowing against it. Permanent life insurance premiums cost more than term premiums because of the savings account, but the longer you keep it, the higher your cash value. For term life insurance, the premiums remain constant but you will pay higher premiums during the first few years. So choosing a policy depends on how long you intend to keep it and what you want from it.
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