What is the difference between term and permanent life insurance?

Understanding your options, a comparison of term and permanent life insurance.

Term Life Insurance:

Should you pass away unexpectedly; term life insurance protects your loved ones for a specified period of time (the term duration) by paying out a guaranteed death benefit to your beneficiary. Typically, term life insurance is easier to understand, and the premium payments are cheaper than permanent coverage. The biggest risk with term life insurance is that it can expire before you pass away.

Permanent Life Insurance:

Should you pass away unexpectedly, permanent life insurance protects your loved ones for a much longer period of time – typically throughout your lifetime. Permanent life insurance is often more expensive than term but there’s less risk since your coverage lasts longer.

There are also many forms of permanent life insurance with different features and benefits – whole life, universal life, variable universal life, and variable life. Some policies may have a non-guaranteed death benefit or a cash value component that allows you to accumulate cash tax-free.