Broker Check

Life Insurance: Term or Permanent?

February 14, 2022

Determining the right type of life insurance for your family’s needs can be confusing and complex. Do you need term, permanent, or a combination of the two? Do you need whole, universal, or variable life?

  • Term insurance is used for replacing lost income in the event of premature death. A term insurance policy covers a specific time period, such as 10 or 20 years. At the end of that period, you normally stop paying premiums and your coverage ceases. Term insurance is typically very affordable because it does not build cash value.
  • Permanent insurance covers you until your death, regardless of age, as long as your premium payments remain up to date. Premiums are typically higher because permanent insurance generally includes an investment component in addition to a death benefit. It’s commonly used for wealth transfer and estate planning purposes and includes whole, universal, and variable universal life policies, each offering different features and benefits. 

If you have questions about the types of life insurance and which may be most suitable for your family's needs, or would like to understand if you have adequate insurance in place, reach out today.

This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.

The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable by having the policy approved. As with most financial decisions, there are expenses associated with the purchase of life insurance.  Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. The guarantees provided by the insurance company are contingent on the claims-paying ability of the issuing company.