A Comparison Between Term and Permanent Life Insurance
There is a tremendous discussion concerning the value of term life insurance versus permanent life insurance. Term life insurance is the most popular type of life insurance because of the low cost and ease of understanding. This article is a basic look at the advantages and disadvantages between term and permanent life insurance.
Term Life Insurance
Advantages
When compared to permanent life insurance, the cost of term life insurance is much less expensive.
When living with a limited budget, term life insurance allows people to give their family significant financial protection.
Term life insurance is good for covering obligations that have a definite end such as mortgage, car loans, and college tuition.
Disadvantages
When the term expires, the cost will be much higher because you are older.
There may be a possibility that your health could deteriorate preventing you from qualifying for coverage.
Permanent Life Insurance
Advantages
Offers lifelong protection if premiums are paid
Depending on the type of permanent life insurance, the cost can be fixed, or they can be flexible.
The policy accumulates cash value which can be borrowed.
The policy can be cashed in or converted into a guaranteed stream of income.
There is a multitude of add-on options called riders that can cover another family member, allow premiums to be paid in the event of disability, and much more.
Disadvantages
The premium is higher than term life insurance in the beginning
Cash values can be dependent upon the performance of the life insurance company.
By Van Richards
Van is the founder of Advice4LifeInsurance and Advice4Retirement. You can contact him at van@advice4lifeinsurance.com Follow on Twitter @VanRichards or Facebook at https://www.facebook.com/advice4lifeinsurance/ and https://www.facebook.com/Advice4Retirement/