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Term vs. permanent life insurance

Choosing between term life or permanent life insurance can be a difficult decision. While both of these types of life insurance can be good options, some people will do better with one type of policy than the other one. Of course, in order to figure out which one is right for you and your family, it’s important to understand the terms and conditions of each of these policy types.
Both of these types of life insurance are a good way to provide money to your loved ones in the case of your death. Term life insurance is meant to only provide money to the policy’s beneficiaries in the event of the policy holder’s death. There is no other way to get money out of a term life policy.
Permanent life insurance (also referred to as whole life), on the other hand, is meant to pay out for more than just the case of the policy holder’s death. Permanent policies typically work like a term life policy combined with an annuity. It is designed so that the policy can accumulate a cash value over its lifetime. After paying premiums for a set number of years, permanent policies will start to pay money back to their policy holder. In addition, some permanent policies include provisions that allow them to pay out earlier in the event that a policy holder is disabled.

Both of these policies have different payment terms. A term life policy will only pay a lump sum amount in the event of the policy holder’s death. A whole life policy, however, will pay either monthly payments after a pre-determined number of years or as a lump sum if the policy holder chooses to cash out the policy or if the policy holder dies.
The biggest difference in these two types of insurance products is in how long they last. Term life insurance is designed to only last for a pre-set number of years. The longer the term, the more expensive the coverage is. A permanent life insurance policy on the other hand will last the rest of a policy holder’s lifetime.
In addition to having different payment schedules, a person can choose how much coverage he or she wants with either type of policy. A single person, for example, may choose to only buy a term policy to cover his or her burial expenses, or he or she might choose a whole life policy that could help him or her start saving for retirement. In fact, many people at many different stages of their life choose permanent life insurance because it can help them to save for retirement or reach other long term savings goals. Other people opt for term life because they are just looking for a basic policy and they want to save for retirement on their own.
If you’re looking at life insurance, carefully read through each of your policy options before deciding on the coverage that is right for you and your family. This is a major financial decision, and it deserves a lot of research time.

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