Term Life Insurance vs. Permanent Insurance
Everyone benefits from carrying life insurance. It helps ensure that your family is protected in case something should happen to you unexpectedly. Because burial and other funeral costs are so high, having this insurance will help alleviate the burden on your family. It’s helpful to know the difference between term life insurance vs permanent insurance before buying life insurance.
Term life insurance is often the easiest type of insurance to understand because it simply pays a death benefit. However, the policy is taken out for a specific term, which means that no benefits are received if you live past the policy’s term.
Permanent policies offer a death benefit, combined with a savings account. It’s possible to get the amount of the premium back when you cash in on it. Because of the savings account, you might even earn more than what you paid into it. Another difference is that you can borrow against a permanent policy.
One of the biggest concerns that many people have when they’re shopping for insurance is how much their premium will cost. Permanent policies typically cost more because the money is invested. However, advantages include a cost that stays consistent and the fact that the money is tax-deferred.
Many advise that, when you’re deciding between term life insurance vs permanent insurance, you select term life insurance if you plan to hold the policy for a shorter period of time. Permanent policies are generally better for those who plan to keep them for periods of 20 years or more.
For more information about Permanent policies or policies in general, contact Schumacher Insurance.