Additionally, life insurance offers many tax advantages. Premiums are generally more expensive than for term life insurance because a portion of the premiums are applied toward your cash value buildup. However, the cost of renewing term insurance can eventually cost you more than the cost of purchasing permanent life insurance. The policy owner may access the cash value through tax free loans or tax favored withdrawals. Both loans and withdrawals will reduce the cash value and death benefit.
Loans are subject to interest charges.
Provides life insurance coverage for a specific period of time. To continue coverage after the specified term has elapsed, you will need to reapply for a new insurance policy. At that time, the insurance company will again consider your health when determining whether to grant you the insurance. Premiums are generally less expensive than for permanent life insurance over a short time span. However, the cumulative costs of renewing term insurance can eventually cost you more than the cumulative cost of purchasing permanent life insurance only one time.