Term vs. Permanent Life Insurance

How does permanent life insurance work?

Permanent life insurance can offer lifelong coverage as long as you pay your premiums and meet policy terms. These policies often cost more than term life insurance, but they may also build cash value over time as you make premium payments.

Your cash value can grow tax-deferred, depending on your policy. Once you accumulate enough cash value, you may be able to borrow against it or withdraw from it.

Aflac offers whole life insurance and final expense life insurance, which are two types of permanent life insurance.

Types of permanent life insurance policies

Some popular permanent life insurance options include:

• Whole life insurance: Whole life insurance can offer fixed premiums, lifelong coverage and a death benefit. It also includes cash value that may grow at a predictable rate over time.
• Universal life insurance: Universal life insurance may let you adjust your premiums and death benefits, offering more flexibility. For example, you can lower your premiums by decreasing your death benefit or secure a larger death benefit by increasing your premiums. Meanwhile, its cash value can grow based on market rates, though policy details and costs vary.²
• Final expense life insurance: Final expense insurance is a permanent policy designed to help cover funeral costs, burial expenses and other end-of-life costs. It typically has a smaller death benefit and may not require a medical exam.

What are the differences between term and permanent life insurance?

The main differences between term life insurance vs. permanent life insurance include:

• Coverage length: Term life insurance only lasts for a set period, while permanent life insurance can last your entire life if you keep the policy active.
• Cost: Term life insurance usually has lower premiums than permanent life insurance. Permanent life insurance generally costs more because it offers lifelong coverage and may build cash value.
• Cash value: Permanent life insurance policies may include cash value you can borrow against or withdraw from. If you surrender the policy, you can get the cash value minus any surrender charges. In contrast, term life insurance typically doesn’t build cash value.

Should I choose term or permanent life insurance?

When comparing permanent life insurance vs term coverage, consider how long you need protection and whether cash value matters to you. The best choice between permanent vs. term life insurance depends on your needs, budget and goals.

Term life insurance may work well if you:

• Need coverage for a specific period
• Want lower premiums
• Want coverage while raising children or paying off a mortgage

Permanent life insurance may work well if you:

• Want lifelong coverage
• Want a policy that can build cash value
• Have long-term dependents or estate planning needs
• Have room in your budget for higher premiums

Get a quote for Aflac's term and permanent life insurance

In summary, term life insurance may be a strong option if you want lower premiums and temporary coverage. A permanent life insurance policy may work well if you want lifelong coverage and potential cash value.

In either case, Aflac can help you find the right policy for your needs. We offer term, whole and final expense life insurance policies with reasonable rates. Chat with an agent today to explore your life insurance options and get a quote.

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