Policyholders paying a consistent premium are able to keep a permanent policy in force, until the policyholder chooses to cancel coverage or until death. With permanent life insurance, policyholders pay a higher premium in the first few years. Portions of the premiums being paid into the policy accumulate in an account earning tax-deferred interest. Term Life Insurance Term life insurance plans offer life insurance for a certain number of years. Because term life insurance policies offer coverage for a fixed period of time, term insurance is typically less expensive than permanent coverage.
Policyholders can receive high coverage amounts for a fraction of the permanent plan cost.
This is a simple and often incorrect viewpoint. Although term insurance can initially be less expensive, it may not be the most economic choice in the long term. The truth is, there is no BEST type of insurance policy. Every client has a different financial situation and financial need. The best insurance plan is the one that fits the need best.