Term Insurance Or Permanent Insurance

Two Life Insurance Policies Which Are Quite Different

Does the “term insurance or permanent insurance” debate still rage? Have people concluded which is best? It is the opinion of this author that there really is no contest. Term insurance and permanent insurance perform in different ways. They both have a death benefit that is paid to the heirs on the death of the insured. This can be paid in the form of an income or in a lump sum. You can add the waiver of premium rider to either type of insurance but that is about where the similarities cease. Term insurance or permanent…which do you prefer?

The rise in popularity of term life insurance in recent years has caused the insurance industry to really look at themselves. They have been forced by the people who really count, the consumer, to re-examine their policies. This has brought about some valuable restructuring of the life insurance policies themselves. Life insurance companies have made existing policies better and have created new types of life insurance policies. The term insurance or permanent debate has certainly served to educate the public on life insurance matters. People know which policy they prefer.

Term Life Insurance includes policies like:

• 5 Year TermThis policy has a level premium as well as a level death benefit. It is the least costly of the level term policies but lasts only 5 years.
• 10 Year TermThis is also quite inexpensive and has a level death benefit for 10 years as well as a level premium.
• 15 Year TermThis is a little more costly than the previous 2 but it fulfills the needs of people who desire insurance for 15 years. It has a level death benefit as well as a level premium.
• 20 Year TermThis can be considered a giant compared to other term policies. This one seems to fit most situations. It has a level premium in most cases for the entire 20 year term period and a level death benefit.
• 25 Year TermThis one, the 25 year term policy, is not too well known simply because it is not promoted as much as the others. This is quite similar to the 20 year term policy except that it has 5 years on the 20 year term and is a little more costly.
• 30 Year TermThis could very well have been designed to put up a good showing in the term insurance or permanent debate…30 years is a long time. Most policies are designed with a level death benefit as well as a level premium.

These are the permanent policies:

• Universal LifeUniversal life insurance is really a term policy with a savings plan attached. Some of them work pretty well.
• Whole LifeThis is the most complete type of life insurance policy you can buy. The details will amaze you. You accumulate cash values in the policy itself and you may earn a dividend each year depending on the company’s performance. I say may because dividends are not guaranteed.
• Variable LifeThis is a whole life policy with an investment attached. It works well for some.

Each of the policies mentioned are done a bit different by the varying life insurance companies. There are also modified versions especially of the whole life policy.

In my opinion people have concluded which type of policy they want. Term insurance or permanent…isn’t it great that we have a choice?