Term Insurance versus Permanent Insurance

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Learn the difference between
Term and Permanent insurance
for your family’s sake.

Term insurance policies offer premiums level for a stated term, as opposed to permanent insurance policies, which offer premiums level for the insured’s lifetime. The following are additional differences between Term and Permanent life insurance policies.

Term life policies:

1. Most Term policies expire between ages 75 and 85. Empire Life offers a renewable term 10 and 20 plan at age 100. In addition, BMO and Transamerica have Term 30 plans renewable to 100.

2. Term policies do not build a cash value. If the insured cancels a term policy, there’s no cash value returned to the policy holder.

3. Term policies do not offer any paid-up values or features if the insured has to stop paying his or her premiums.

4. Term life policies do not allow the insured to take a premium holiday. As stated, term life policies do not have a cash value. If the insured misses a premium, the policy will generally lapse within 31 days.

Permanent policies:

1. Permanent policies can take the form of Whole Life, Universal Life, or Term 100 coverage. Under all of these plans, the insured generally will have coverage for his or her lifetime.

2. Most permanent policies build a cash value. Participating Whole Life policies have a guaranteed cash value and a non-guaranteed cash value which is referred to as their dividend value.

3. Permanent policies can be paid-up in a limited number of years. Many permanent policies have the option for the insured to have a paid-up policy after 10, 15, or 20 years. Therefore, if the insured decides to no longer pay after the paid-up date, he or she will continue to have coverage for the lifetime.

4. Permanent policies allow the insured to take a premium holiday. Because most permanent policies have a cash value, this cash value can be used to offset premiums for a period of time, if the insured were unable to pay his or her premium.

For more details on Term and Permanent policies, please contact us at 1-866-899-4849, or visit our Term Life Insurance and Permanent Life Insurance Instant Quote Pages.

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  • LSM Insurance
    January 4, 2014 at 1:16 pm

    Gail Vaz-Oxlade wrote an interesting article which further highlights the differences of Term vs Permanent Insurance https://www.gailvazoxlade.com/articles/just_in_case/term_vs_permanent_insurance.html

  • LSM Insurance
    January 4, 2014 at 1:15 pm

    Jason a 59 year old can not qualify for a Term 30 policy. Term 100, Universal Life or Whole Life policies would be available. You may first want to get a preliminary inquiry if it looks like a declined or heavy rating Simplified Issue policy may be a better route.

  • Jason
    January 4, 2014 at 1:13 pm

    How Much is $300,000 Term 30 for a diabetic who is 59 an on insulin. Otherwise pretty good health – but he’s a smoker.

  • Luciano
    December 1, 2013 at 9:23 am

    Rarely do I come across a blog that’s equally educative and entertaining, You hit the nail on the head there is no best type of insurance it depends on the type of plan

    • LSM Insurance
      December 1, 2013 at 11:58 am

      Thanks Luciano. That’s nice of you to say.

  • LSM Insurance
    April 19, 2011 at 4:47 pm

    Thanks for the note. The rates will depend on you smoking status and the policy face amount. We will send you a separate email now.

  • Francisca
    April 19, 2011 at 1:24 pm

    Hi, Would you please elaborate more of this permanent policies. I am 43 years old and wanted to just pay 10-15 yrs policy but still covered lifetime. Thanks and hope to hear from you soon.