I’ve said it before, and I’ll say it again – insurance can be confusing – and that’s coming from someone who works in insurance. Life insurance is a particular point of confusion for many people, since there are many different coverage options available. Which brings us to the real topic at hand – what’s the difference between Term Life Insurance and Permanent Life Insurance?
The distinction is actually pretty great once you understand a bit about life insurance. Ultimately, while the two types of policies offer almost the same coverage, the length of coverage changes.
With Term Life Insurance, your policy has a set time-frame in place – ranging anywhere from five years to 50. Your family will receive the benefits of this policy only if you die with the specified time period that you’ve agreed to. Term Life Insurance is often more affordable than Permanent Life Insurance since the cost of the premium decreases every year that you get closer to the end of the timeframe.
Permanent Life Insurance (sometimes referred to as Whole Life Insurance) on the other hand, provides life insurance coverage for the entire duration of your life. Since your insurance company has a guaranteed pay-out (we’re all going to kick the bucket eventually and when the time comes this policy will cover the cost of funeral expenses), the insurance premium is slightly higher and does not decrease over time.
If your income is important to supporting dependants, planning for your future, sending your children to college, paying the mortgage or other recurring bills – life insurance is worth talking about. With life insurance, your family can continue to have the same quality of life following the passing of one or both parents.
It’s important to think about both your needs and your budget before purchasing a life insurance policy. Talk to your insurance broker today at 1-888-298-7343 to see if life insurance is right for you!