Should You Purchase Term or Permanent Life Insurance?


Deciding between term life insurance and permanent life insurance can be daunting. If you have never purchased a life insurance policy before, it can be downright confusing. What are some of the major differences between a term and permanent life insurance policy? The difference between the two is actually quite simple: term life insurance offers a life protection policy for a certain amount of time (usually between twenty and thirty years) and a permanent life insurance policy is a lifelong policy that can either appreciate with age or garner returns through interest, stocks and bonds. When it comes down to it, exploring term and permanent life insurance a little further will help you decide which policy is right for you.
First, let’s look at term life insurance. This is usually a low risk, low maintenance policy that you can acquire for set number of years. The cash benefits after you pass on are rewarded to your beneficiaries or next of kin. If you are a sole breadwinner and are concerned about what would happen after you are gone, you would probably purchase a policy to protect your family and to give them financial leeway. When you look though some of the Selectquote term life insurance rates, you will notice that most the term life insurance quotes are actually quite fiscally manageable, which can be beneficial if you don’t have a big budget.
Next, let’s look at permanent life insurance. Permanent life insurance, like the name suggests, is a policy that lasts forever – it doesn’t end after a certain term. You may apply for a permanent life insurance policy if you have assets and want to see your money grow. Basically, a permanent life insurance policy offers cash and bond style coverage for your descendants. When you pass on and the funds mature, the money is usually tax-exempt – depending on your specific type of policy. This is why people with large estates and cash holdings opt for a permanent life insurance policy – it will better protect a legacy.
Between the two main types of insurance policies, permanent life insurance offers a committed financial investment that lasts a lifetime. If you don’t have large funds to protect and you are simply trying to give your family financial assurance, you probably want to go with a term life insurance policy because you can cancel it anytime and there is no burdensome fiscal obligation that lasts indefinitely. You can also purchase a term policy for ten years if you want to start things off and then work your way up when you feel comfortable – or when you feel like your family needs more coverage.
Lastly, purchasing life insurance is one of those things no one wants to do because it forces you to think about your mortality. However, thinking about your mortality is important, especially if you have a family that depends on your earnings. At the end of the day, term life insurance is the most common form of coverage, but if you need something more protective of your assets, a permanent life insurance policy is probably your best bet.

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