Term Insurance is the most affordable type of insurance when initially purchased. It is designed primarily to meet temporary needs. It provides protection for a specific period of time (the “term”) and generally pays a death benefit only if you die during the term. Term insurance often makes sense when you have a need for coverage that will disappear at a specific point in time. For instance, you may decide you only need coverage until your children graduate from college or a particular debt is paid off, such as your mortgage.

Permanent Insurance, by contrast, provides life-long protection. As long as you pay the premiums, and no loans, withdrawals or surrenders are outstanding, the full-face amount will be paid to the beneficiary upon the death of the insured. Permanent life insurance is designed to last a lifetime and it accumulates cash value. Permanent life insurance is therefore more expensive than term insurance for a given death benefit.