Term Life Insurance
Term life insurance and permanent life insurance policies serve the fundamental purpose of helping provide financial protection for beneficiaries when an insured person dies; however, they operate differently and may offer distinct benefits.
Term Life Insurance
Term life insurance is relatively straightforward. It offers coverage for a specific period, or “term,” typically ranging between 10 and 30 years. If an insured individual passes away during this term, their beneficiaries can apply to receive a death benefit payout. If the term expires and the insured person is still alive, the coverage ends, and there is no payout.
This type of life insurance is generally more affordable than permanent life insurance, making it a popular choice for those seeking more cost-effective coverage, especially when starting a family or during high-expense periods.
Permanent Life Insurance
Permanent life insurance, which includes whole life, universal life and variable life insurance, offers lifelong coverage if premiums are paid as agreed. It usually includes a cash value component that may grow over time and can eventually be accessed or borrowed against.
Certain types of permanent life insurance, such as universal life insurance, offer flexible premium payments and adjustable death benefits.
Permanent life insurance is significantly more expensive than term life insurance. The higher premiums are largely due to the length of coverage and the cash value component.
Making the Right Choice
If your primary goal is to provide financial security for a specific period, such as until your children are grown or a mortgage is paid off, term life insurance might be more appropriate. If you’re looking for lifelong coverage and a savings component, permanent life insurance might better align with your goals.
Your agent can help determine which policy aligns best with your needs.
Contact Us
Contact AR Insurance Solutions in Oakland, California, to learn more about your life insurance options and get a quote.