Difference between Term Life Insurance and Permanent Life Insurance

Permanent life insurance as the name suggests is a form of life insurance which will last for the entire life of the person insured. Typically term life insurance is purchased for a fixed term, be it for a year or five, or even as long as 30 years.
In term life insurance, the consumer pays a premium and the payout is paid in the event that the insured passes away during that term. Whereas, a permanent life insurance policy lasts for the insured person’s entire life, so a payout is guaranteed.
Your permanent life insurance premiums are invested, so the policy accrues cash value. Term policies on the other hand, accrue no value and pay nothing unless the insured person passes away during the policy’s fixed term.
Premiums for the two forms of policy are different. A permanent policy charges higher premium than for a term policy.
But a point to note; the premiums for that term policy rises with the age of the insured person. But it is reverse for a permanent life insurance; in fact the initial premium gets invested and grows.
That growth is tax-deferred if the policy is cashed in during the insured person’s lifetime. Proceeds are usually tax-free to the beneficiary upon the insured person’s death.
So, which insurance is right for you?
Well it all depends on your needs. Like how long you plan to keep it for? If you only need a certain amount of coverage for a short amount of time, then chances are that a term policy will best suit your needs. If, on the other hand, there are expenses you will leave behind, then a permanent policy could be the right choice.