Term Insurance vs Permanent Life Insurance

Term insurance, the majority of the time time will be more than sufficient to accomplish a personal or family insurance goal.  Since the purpose of purchasing life insurance is to offset a financial risk(loss/replace income, mortgage protection, final expenses) in the event of a premature death, the variety of term insurance products in the market place is vast and product rich.  Most of the time, term insurance is the most cost effective way to provide the protection young working families need.

Distinguishing characteristics of Term Insurance:

1. Affordable
2. Designed for "short-term" goals (1-30yr)
3. Level Death Benefit and Level premium that does not change for duration or "term" of coverage
4. Predictable COI and profitable for insurance companies
5. Bells and Whistles (return of premium, living benefit riders, term conversion privideges)

Permanent Insurance, is a catch-all phrase incorporating whole life and all types of universal life insurance.  The utility of permanent insurance is that you can assure coverage beyond a designated term but more common, is the ability to benefit from the cash value component of the policy.  Permanent insurance policies are usually much more expensive than a term insurance policy and are generally most suitable for business owners that are seeking alternative, tax-advantaged accumulation vehicles.