Term versus Permanent Insurance.
Permanent life insurance differs a great deal from term life insurance in that term life provides death benefit protection only, without any type of cash value or savings build up. In addition, term life insurance is sold for certain time limits, or “terms.”
These can be for 5 years, 10 years, 20 years, or even 30 years. There is also an annual renewable term life insurance that is sold for one year increments. Each time a term life insurance policy expires, the insured will typically have to re-qualify for coverage if he or she wishes to continue being covered.
If they do qualify for a new term life insurance policy, the new premium rate is likely to be higher, due to the insured’s then-current older age. For those who are young and in good health, however, term life insurance can provide a good way to obtain a large amount of life insurance protection at a relatively low premium rate.