What’s the difference: Term or Permanent Life Insurance?

There are two different types of life insurance policies: Term and Permanent. Term policies are set over a period of time and usually are much more affordable than buying a permanent plan. Term plans are usually used when you are safeguarding against pre-mature death, and this is done for many different reasons, such as working in a dangerous field/environment, or lack of savings or other sources of family income. Just remember, as long as your payments are up to date during your term, you’ll be just fine!

With a Permanent Life insurance policy, you’ll be covered until you pass away—but just like a Term policy you will have to always pay on time or you’ll lose your coverage! Permanent policies are used for estate planning and are also used to transfer wealth to beneficiaries, but since these policy payouts are usually pretty large it raises the prices of premiums for Permanent policies a lot more than a Term policy.

One strategy to use if you cannot afford a permanent policy yet is to use a Term policy until you feel that you are ready to take on the higher premium—that way you can have access to life insurance for a lot less than it would for the same amount of Permanent insurance!

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