Term or Permanent Life Insurance Coverage: Which is Right for You?

When it comes to purchasing life insurance coverage, there are two main types of policies to consider: term and permanent. Both types of coverage can provide valuable financial support for your loved ones after you pass away, but they differ in some key ways. In this blog post, we’ll explain the difference between term and permanent coverage so you can make an informed decision about which type of policy is right for you.

Term Coverage

Term coverage is a type of life insurance that provides coverage for a set period of time, typically 10, 20, or 30 years. During the term of the policy, you pay a set premium each month or year, and if you pass away during that time, your beneficiaries receive a lump-sum payout. This payout can be used to cover your final expenses, such as funeral costs, outstanding medical bills, and other end-of-life expenses.

One of the primary benefits of term coverage is that it is generally less expensive than permanent coverage. This is because the coverage period is limited, so the insurance company is taking on less risk. However, once the term of the policy is up, the coverage ends, and you’ll need to purchase a new policy if you want to continue your coverage.

Permanent Coverage

Permanent coverage is a type of life insurance that provides coverage for the rest of your life. This means that as long as you continue to pay your premiums, your beneficiaries will receive a payout when you pass away, regardless of when that happens. Permanent coverage is typically more expensive than term coverage because the insurance company is taking on more risk by guaranteeing a payout.

There are several types of permanent coverage, including whole life insurance and universal life insurance. Whole life insurance provides a set premium and a guaranteed payout, while universal life insurance provides more flexibility in terms of premiums and payouts. With both types of coverage, the cash value of the policy can grow over time, providing additional financial benefits.

Choosing the Right Coverage for You

When it comes to choosing between term and permanent coverage, there is no one-size-fits-all answer. It’s important to consider your individual needs and circumstances, such as your age, health, and financial situation, as well as your overall goals for your coverage. For example, if you’re relatively young and healthy, and you’re primarily concerned with covering your final expenses, term coverage may be a good option. On the other hand, if you’re older and you want to leave a larger inheritance or legacy for your loved ones, permanent coverage may be a better choice.

At nexstageLife, we offer both term and permanent life insurance coverage options, and our experienced agents can help you determine which type of policy is right for you.

Contact us today to learn more and to get started on securing your financial future.