Term life insurance provides coverage for a specific period, such as 10 or 20 years – or more. It can be renewed when the term is over, usually at a higher rate. However, it does not build a cash value.
Permanent life insurance offers lifelong financial protection as long as the policy’s premium is paid up until the death of the insured. It also builds cash value that’s funded by a portion of the premiums the policyholder pays. The policyholder can access this cash value, if needed, but any outstanding loans are subtracted from the death benefit when it is paid.
There are several types of permanent life insurance:
- Indexed Universal Life Insurance
- Whole Life Insurance
- Universal Life Insurance
They differ in whether the premiums are level or variable and how the cash value accumulates.
Talk to a financial professional today and find out what type of life insurance is best for you.