Permanent Life Insurance and Term Life Insurance Explained

If you have decided to take a life insurance policy, you have probably taken the right decision. You could be in any difficulty at any time in the future. You care for your family and you do not want to put them at stake. Then life insurance policy could be the best answer for you. But before you choose a life insurance policy, you should know what type of policy to go for. There are basically two types of life insurance policies: Permanent life insurance and Term life insurance. Let us have a look at both of these life insurance policies and their advantages.

Permanent life insurance policy, as the term itself describes is a policy that lasts for a long time. Normally people who shoulder big responsibilities prefer the permanent life insurance policy. A permanent life insurance policy usually lasts for a period of 20 years. Thus the level of protection is high. In case of death before the end of the policy, the life insurance will award a tax free lump sum to the beneficiary. It is advised that you educate yourself well on life insurance policies before confirming a deal. Because premiums are usually higher, other life insurance companies could be offering even higher monthly premium payments. At least compare your quotes until you make the right choice.

When Permanent life insurance pays, there is obviously value for the cash. As long as you get older, the premium amounts are going to increase. Thus there will be a great amount of cash accumulated. With permanent life insurance, you could even borrow the cash to pay for the University for Example, without even paying any penalty fee.

Term life insurance is a type of life insurance policy which provides you cover for a short time. When we talk about life insurance, we think of family protection. Therefore if you are worried for your family for only a short interval, you can easily find the answer at any term life insurance of your choice. There you can specify how much time you want the life insurance for. Compared to Permanent life insurance, premiums for Term life insurance are much lower. As a result, the Term life insurance policy type has many policy holders.

Term life insurance policy is easily affordable. You can also decide to stop paying premiums whenever you want. Term life insurance policy will not make you pay any penalty fee. Also, Term life insurance can easily be converted to Permanent life insurance in case you want maximum protection.

As seen, both types of life insurance can be useful to you. Even if you do a risk free job, you should consider getting a life insurance protection to guard yourself and your family from the uncertainties of the future.

Posted by: glen parker Posted on: April 19, 2007


hadley said...

Term life insurance often provides the most protection at the lowest cost for young couples and families with young children.

Term life insurance offers pure protection, you pay only for the life insurance, there is no cash value build up within the policy.

Level term life insurance is very popular because it provides coverage and premiums that remain the same the entire term of your policy.

Many people buy term life insurance to provide coverage for 10, 15, 20 or 30 years, until outstanding loans are paid off, or their children are grown.

Learn more about how term life insurance works.

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