Hello my friends, EnviZion Insurance here! Today as your Plymouth insurance agent we are going to talk about term life vs permanent life. These are the life insurance products that you can get into as far as life insurance is concerned. Once you figure out the amount of insurance you need, which is another decision, you can then start finding what insurance type you need to that will best fit your unique situation. The two forms of life insurance that you’ll have an option to purchase our term life insurance policies and permanent life insurance policies.

As far as permanent life or term life insurance policy is concerned those are going to be your main types of coverage. So now your Plymouth insurance agent will break down these two options. At a basic level term life insurance is exactly as it sounds. It’s life insurance for a number of years called a term. So you can have a policy with a term of 15, 20, 25, 30 and now you’ll see even 35 years, and that insurance policy will go into place and it will last for the number of years selected for that term policy.

Once the term is over with the insurance is gone. So if you do not pass away in that timeframe of whatever number of years that you have selected, you will no longer have a life insurance policy. That’s, that may seem a little bit like, oh, why would I want to do that? But say your 30 years old, you’ve owned a home for 10 years and you only have 20 years left on your mortgage and you have been retired or saving for retirement and you have a bit of a nest egg put away your= have  a double income with kids and that sort of thing. You can get to a spot with term life insurance where you know, or very confident that you’re only going to need coverage for a certain number of years. And once you reach a certain age, you’re going to have your retirement, whether it be a pension or social security or other retirement funds such as a 401k that will be able to cover you and your family after that life insurance policy term ends.

The other things about term life insurance, and one of the differences from permanent life insurance, is that that premium for term policies are going to be less expensive and stay constant for the entire time that you have in policy. The premium stays exactly the same and does not increase over the life of the term policy. Now if you needed life insurance still once the term of the policy ends you would then need to reapply if you wanted another policy. With all life insurance it becomes more expensive as you get older. And that is what you have to consider when buying term life insurance. Do I have the proper protection in place to cover myself so that when this life insurance policy policies term expires, I will be able to have enough fun set aside, have enough income to pay off all my debts or have my debts paid off so that I don’t need to renew a policy. Or if I do still need life insurance, it will most likely be at a much lower amount that will still not make or break a person’s budget. Working with your Plymouth insurance agent EnviZion Insurance will make this process of figuring out what you need financially much more simple.

The other life insurance option is permanent life insurance. With these policies you are going to see that the maturity date on those policies are until age 100 or 120. Permanent life insurance has a hand full of product types such as whole life, universal life insurance, indexed universal life insurance and guaranteed universal life insurance. These are not all of them, but these are generally the most popular types, and they come with different options. Now let your Plymouth insurance agent break down some key differences of the permanent policies.

A lot of these permanent life insurance policies have more flexibility as far as changing the death benefit or changing the premium amount or seeing, you know, the premium amounts change. Also the other major difference is that permanent life insurance policies build what is called cash value. So when you pay into the policy, your premium is paying fo the death benefit and also paying for funding the cash value of your account. And so what that does is over  say 20 years you pay into your permanent life insurance policy, and you’ve accumulated an amount of cash. You can actually use that cash if you need to. So say you have some unexpected expenses, and you don’t have the funds to pay for it out of your pocket. You can go into your permanent life insurance policy and use that cash value that has been built up to pay for those unexpected expenses. However, most times when you use that money, it’s going to reduce obviously the cash value in the account, but also can reduce the death benefit that would be paid out on the account. Work with your Plymouth insurance agent at EnviZion Insurance will help you decide which type of permanent policy is going to work for your financial situation. 

As far as saying which type of life insurance is better, this is completely situational. What I can say is term life insurance is generally less expensive because you’re not paying for that cash value that’s building up. We will see a more affordable rate for term life insurance, but it does also last for a shorter time than permanent policies do. However, for people that don’t have good savings or good saving habits, a permanent life insurance policy can work two fold as a type of savings account if they don’t think they are able to manage on their own savings well, and they think is a good option for them. So overall, it really comes down to finding which policy type is going to fit your needs best and your personality and your finances most effectively, What is really important is to pick the type of policy that is going to help you financially and puts you in the best financial position. There’s a lot that goes into finding a life insurance policy and your Plymouth Insurance agent Envizion insurance is always here to help.