Term Life vs. Permanent Life Insurance (Whole Life)

The following describes the main differences between term life insurance and whole life insurance, and the benefits of purchasing each.

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Premium Payments

• Term Life: Premium payments for term life policies are much lower than permanent life policies.
• Permanent Life: Permanent life policies are more expensive.

Death Benefit

• Term Life: Term life policies offer a death benefit that your beneficiary may collect if you pass on while your policy is in effect.  If you do not pass on while your policy is in effect, your beneficiary will never receive the benefit.
• Permanent Life: As long as you pay your premiums, your beneficiary will receive your death benefit, regardless of when you pass on. 

Cash Value

• Term Life: Term Life Insurance does not offer a Cash Value.
• Permanent Life: Permanent Life Policies have a cash value, and many even have a guaranteed cash value.  Your cash value can be a helpful financial tool.  You can borrow it (thus decreasing the amount of your policy) to make a down payment on a home, send your child to college, or use for any other purpose you deem appropriate.  You will have to make interest payments if you choose to borrow your cash value.  If you have a Guaranteed Cash Value policy, you will get to keep your cash value if you choose to cancel your policy.

Are You Insurable?

• Term Life: If you choose to renew your term life policy after it expires, your insurance agent will re-asses your insurability.  If you are in an older age bracket, have developed a health condition, or have begun smoking, your policy price may go up, or you may no longer qualify for life insurance.
• Permanent Life: You only have to qualify for life insurance once.  As long as you do not let your policy lapse, you will pay the same rate for your policy, regardless of how your insurability status changes.  

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Term Life Insure provides information at no cost concerning insurance products and services but is not an insurer or an agency. Please speak to your insurance agent for more information. Not all products are available in all states.