Term vs Perm

March 1, 2019

When it comes to life insurance, there are many options available – so many, in fact, that it can be an intimidating process to undertake.

Many clients are overwhelmed, or unsure about which option is best in terms of cost, coverage and meeting their goals. That said, insurance can be quickly and easily simplified by dividing it into two broad categories: permanent and term.

Permanent Insurance :

  • Provides protection for your entire lifetime. Premium cost usually stays level.
  • Has cash values that can be borrowed, and used to cover missed premiums, or withdrawn if the policy is no longer required.
  • Other options allow the policyholder various possibilities of continuing coverage if premiums are missed or discontinued.
  • If the policy is participating, it receives dividends that can be taken in cash, left to accumulate at interest, or used to purchase additional insurance.

Term Insurance :

  • Suitable for short term insurance needs, or specific liabilities like a mortgage.
  • Provides more immediate protection because, initially, it is less expensive than permanent insurance.
  • Can be converted to permanent insurance without medical evidence (if it has a convertibility option), but will expire at age 80.

Each type of coverage has its pros and cons. If you have questions about insurance options and what would best suit your needs and goals, please contact us – we’d be happy to answer your questions!