What is the difference between term life insurance and permanent life insurance?

Term life insurance and permanent life insurance are two primary types of life insurance products that serve different purposes and offer distinct features. Term life insurance provides coverage for a specified period, typically ranging from ten to thirty years. It is designed to offer a death benefit if the insured person passes away within the term of the policy. If the insured survives the term, the policy expires and no benefit is paid. Term insurance is generally more affordable than permanent insurance, making it an attractive choice for those seeking cost-effective coverage during significant life stages, such as raising a family or paying off a mortgage. On the other hand, permanent life insurance provides lifelong coverage as long as premiums are paid. This type includes various policies, such as whole life and universal life, which often accumulate a cash value over time. The cash value component allows policyholders to build savings that they can access during their lifetime. Permanent insurance tends to have higher premiums compared to term insurance but offers the advantage of lifelong protection and the potential for cash value growth. Each option has its benefits, and individuals should consider their financial goals and needs when making a choice.