Term Life Insurance vs. Permanent Life Insurance
By Bill Mason
Choosing a life plan is difficult; it takes a lot of time and research in order to ensure that all aspects are thoroughly examined before making a final decision. There are basically two forms of life to choose from: term life insurance and permanent life insurance.

Below you will find valuable information regarding both forms of life as well as other helpful information which will assist you in deciding which form of life is best suited for you and your situation.

The first thing to do is to research and understand the concept of both forms of life insurance. These two forms of have been compared to buying or leasing a car. Term life is much like leasing a car, you can purchase for a specific number of years, but once those years are up, so is your coverage. Permanent life insurance is similar to buying a car. When you buy a car, it’s yours and you can drive it forever if you like. Permanent life stays with you until you die.

Depending on your situation, each form of can be very beneficial and offer many great opportunities. Below you will find a more in-depth explanation of each form of providing advantages and disadvantages of both.

Term Life

Benefits
• Term life is inexpensive and can cost a considerable amount less than permanent life



insurance.
• There are no strings attached with this form of and you are free to stop paying whenever you want.
• You can begin using term and if you feel like you want more coverage, you can then convert to permanent life if you wish.

Downfalls
• Term life only provides coverage. There are no other rewards and there is no cash value.
• Yes you are free to stop paying whenever you please, but should you choose to do so you will no longer have any life coverage.
• Term prices increase at a rapid pace as you get older and as you get older, your need for this type of will become more and more crucial.

Permanent Life Insurance

Benefits
• Permanent life can accumulate into cash value and savings. Any cash value which you receive will be tax deferred.
• There is no risk involved in this form of insurance. Your loved ones will receive a death benefit regardless of when you pass away, whereas term life will only pay out if you happen to be covered when you die.
• You can borrow the cash value you receive to pay for college, a vehicle, etc. You can do this without receiving a penalty for doing so.

Downfalls
• The most noticeable disadvantage to permanent life is the cost. This form of life will cost you a great deal more than term life insurance.
• Should you decide to forgo your permanent life coverage, you will be required to pay a large penalty which will be bounded by law.


Bill Mason is a retired insurance agent who now writes as a freelance writer for insuranceguide101.com – a site that offers information on auto insurance, pet insurance, boat insurance and more.

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