In addition, permanent policies build cash value , which you can use to fund future expenses, like college tuition or retirement. You can vary the frequency and amount of premium payments. You also can change your insurance death benefit to reflect changes in your family's situation. Universal Life policies earn competitive interest and accumulate cash value on a tax-deferred basis. Term insurance provides insurance protection for a specific period of time, or term, such as one, five or 10 years.
Some policies are renewable at the end of a term.
Because term policies do not provide a lifetime of protection, premium rates are generally lower than whole or universal life policies. Term insurance is often the choice of younger people who need more coverage at an affordable cost. It also is a good choice to cover specific needs that have a foreseeable end, such as a mortgage or loan. This is the amount of insurance purchased. It may include dividends, and sometimes, cash value.