Term Life Insurance Vs Permanent Life Insurance

Life insurance is basically divided into term life insurance and permanent life insurance. If you are finding it difficult choosing between these two major life insurance policies, this piece should help you make informed decisions.


This is the main area of difference between these two life insurance policies. Term life insurance only offers coverage for a definite period of time. The most common length of term life insurance coverage are 10, 20, and 30-years. In contrast to term life insurance, permanent life insurance gives you coverage throughout the duration of your life.


One of the reasons term life insurance is popular is because its premiums are inexpensive. You can easily buy term life insurance at an amount that won’t put a hole in your pocket. However, the reverse is the case with permanent life insurance. Due to the lifetime coverage permanent life insurance offers, its premiums are on the high side. While term life insurance premiums are fixed for the duration of the policy, permanent life insurance premiums can be adjusted to fit your current needs.

Cash value

Unlike term life insurance that does not have cash value option, permanent life insurance allows you build up cash value. This cash value is the money that accumulates value during your lifetime. It is paid alongside with the death benefit to your family in the event of your death. In addition, your life insurance company can allow you take a loan from your cash value if it has enough funds.