Term or Perm: Which Insurance Is Best for You?

If you’re looking for life insurance, you’ll probably want to ask yourself an important question.

That question usually is: What type of life insurance is the best fit – term or permanent?

Both types of life insurance have their uses.

The one you choose will depend on a number of factors.

There are some very important differences between the two.

Term life insurance, for example, provides coverage over a set period of time, such as 15 to 30 years, then expires.

Permanent life insurance lasts until death.

Term life insurance may appeal to many people because it is the easiest to understand and often is the most affordable.

It might be a good choice if you’re trying to ensure that you’ve provided for specific expenses, such as a mortgage or your child’s college education.

Permanent life insurance may be more expensive, but it also often builds a savings account that grows tax-deferred.

It might be a good option if you’re trying to ensure that you’ve provided for your beneficiaries.

Term and permanent life insurance policies aren’t the only two options, though.

Hybrid options are available that allow you to convert a term life insurance policy into permanent life insurance at a later date.

These convertible policies are usually more expensive.

However, such policies might be useful if you develop a chronic health condition that makes it difficult to qualify for new coverage after your term expires.

Your advisor can help you determine which type of policy is best for you given your individual circumstances and goals.

Moreover, whichever type of life insurance you choose, it’s important to check rates and ratings.