What is the difference between term and permanent life insurance?

There are two main categories of life insurance for those who are interested in coverage. These are called term life insurance and permanent life insurance. It is also important to be mindful of the fact that the state of California also has its own unique set of rules and laws regarding life insurance. This includes unique types of life insurance such as whole and variable. For the sake of simplicity, this discussion will be limited to the two most common.  

The more common and straightforward option is term life insurance. You can purchase life insurance for the duration of your choosing, say 10 or 20 years, and you pay a premium to be covered for a certain amount during those years. In the event of your death, the insurance company pays your family the amount specified in your policy. If the purchaser is still alive at the end of the term, then there is no payout. The duration and payout amount are really the only thing the consumer needs to be concerned with, which makes this the simpler and more attractive option for most people.  

Permanent life insurance is obviously quite different. By definition, this is a policy that is meant to be forever, regardless of when the purchaser may die. The amount is usually an accumulation of money paid into the policy over time, which will affect the amount paid out to family members in the event of the purchaser’s death. Due to this factor, payout amounts can vary greatly based on the amount of money invested and the timeframe the purchaser was paying into the policy.   

For more information, please contact Voi Insurance Solutions, LLC serving the Glendale, CA area. We can also be reached at our office in Glendale, CA to speak with an agent at Voi Insurance Solutions, LLC directly.