Which Life Insurance Is For You; Term or Permanent

​Insurance is a contract in which an individual or entity receives financial protection or reimbursement against uncertain losses from an insurance company. There are two types of insurance; term life and permanent life. In this article, we are going to discuss what it means, and the differences between the said types of insurance.

​Term Life Insurance
The term is a type of life insurance that guarantees payment of death benefit during a specified time. Once the term expires, the policyholder can either renew for another period, convert to permanent coverage, or allow the policy to terminate. There are many different types of term insurance mainly based on monthly rates such as length of terms, guarantee period, riders, and conversion options.

Benefits of Term Life Insurance

• Generally offers the lowest monthly premiums and highest death benefits during the initial term and is already guaranteed, but it varies from insurance companies.
• It is renewable in increasing term; 5-year term, 10-year term, 20-year term, 25- or 30-year term.
• Depending on the insurance carrier, they may offer none, limited, or full conversion option to any permanent life insurance without additional underwriting.
• It is the perfect solution when insurance protection is needed for a limited period, for example until children become adults, or finish college.

​Term Life Insurance is not designed to be kept beyond the initial term. Most people either convert to a permanent policy, replace it with another term life insurance, or in some cases discontinue coverage when either protection is not needed.

Permanent Life Insurance
Permanent life insurance offers life-long coverage and typically have a cash value component. The cash value grows over time and can be used to pay premiums or take out a loan from the insurer. There are different types of permanent life insurance ample for various people and financial institutions such as variable universal life, traditional universal life, indexed universal life, and whole life.

The initial monthly premium of permanent life is significantly higher compared to the initial premium of term life. Most types of permanent life insurance generally cost a person much less than the term life insurance especially if you consider the cost of the term life’s premiums after the initial guarantee period.

Benefits of Permanent Life Insurance

• It is suitable for those who need coverage for an extended period or their entire life.
• Many have used permanent policies to take advantage of the tax benefits because the benefit and cash value over the years can increase in value and become an enormous asset and some leave the remaining balance of to their heirs.
• Other types of policies are flexible; you can pay the minimum, the maximum, anything in between, or none at all.

Which Is Better, Term or Permanent Life? 
Both types are excellent choices depending on people’s choices. It is imperative to understand each financial situation and the goals and have a smart plan to match people’s needs to the proper kind of solutions instead of randomly picking up policies without fully considering the long-term effects. It is vital that the chosen policy type is appropriate to an individual. 

It is essential that agents should do a proper fact-finding and needs analysis to recommend suitable coverage types and in sufficient amounts. It is critical that clients work with a genuinely independent agent, one who has access to all the reputable carriers and options and is capable of recommending solutions to help people reach their short-term and long-term goals.
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Whether you choose Term or Permanent Life insurance, you need to choose a reputable insurance company to help you make a decision. At Ideal California Insurance Agency, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (818) 241-4515 or Click Here to request a free quote.