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What are the differences between term and permanent life insurance? I'm trying to understand the differences between term and permanent life insurance. Can someone explain the key distinctions between these two types of life insurance policies?
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Term life insurance provides coverage for a specific period, such as 10, 20, or 30 years, while permanent life insurance provides coverage for the entire lifetime of the insured individual. Term life insurance is typically more affordable initially, but the premiums may increase when the policy is renewed. On the other hand, permanent life insurance usually has higher initial premiums but offers a cash value component and lifelong coverage. Additionally, term life insurance does not accumulate cash value, whereas permanent life insurance can build cash value over time. It's important to consider your financial goals and needs when choosing between these two types of life insurance, as they serve different purposes and have distinct features.
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