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Term Life Insurance Vs. Permanent Life Insurance

Term life policies provide life insurance coverage for a certain amount of time (usually between five and 30 years). If you outlive the term of your policy, your beneficiaries will not receive a payout. 

Permanent policies remain in effect for your entire life, as long as the premiums are paid on time and in full.

Learn more about the differences between term life and permanent life insurance below.

Term Life

Term life policies are typically more affordable than permanent policies because term life coverage is temporary and does not accrue cash value. Term policies may be a good fit for parents or for spouses who want to ensure the financial security of their dependents during a critical time in their life, such as paying a mortgage or paying for a child's education.

Permanent Life 

Permanent life insurance provides lifetime coverage (as long as you pay your premiums on time) and includes an cash value component that is not offered by term life policies. You can borrow against the cash value of the policy, or collect it when the policy is surrendered. A permanent policy may be a good fit for someone who wants lifetime coverage and is interested in the investment vehicle it offers.

Differences in Cost

The annual rate of a life insurance policy will vary based on several factors, including:

  • Policy type
  • Death benefit amount
  • Term length (if applicable)
  • Your age
  • Your health
  • The insurance company from which you purchase your policy

Below, we examine the price that a 30-year-old male and a 30-year-old female may pay for a $250,000 20-year term life policy vs a 250,000 whole life policy.

$250,000 20-Year Term Life Policy:

  • Male: $156
  • Female: $141

$250,000 Whole Life Policy:

  • Male: $2,385
  • Female: $2,114

Note: These figures were taken from NerdWallet* and were calculated using the average of the three lowest quotes available in each category for healthy men and women. The amount you'll  actually pay for a policy will vary.

Speak With a Licensed Agent

A licensed agent can help you weigh your options and choose a policy that works for you. Contact an agent today at 1-800-966-7169.

*Applications for insurance may be subject to acceptance by insurer. Rates and coverage amounts will depend upon the carrier selected.


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