There are many options to consider when purchasing a life insurance policy. Understanding the following differences between term life insurance and permanent life insurance can help you make an informed decision:
- Term life insurance offers protection for a finite period of time (10 to 30 years), and permanent life insurance policies offer lifetime protection. See Term Life Insurance Made Simple.
- Permanent life insurance builds cash value and term life insurance does not. An Allstate personal financial representative can help you understand the difference between different types of life insurance and answer questions to help you decide what's right for your family.
Understanding the fundamentals of term life insurance can help you make more informed decisions about what your family will need. Taking a little time to learn now can help you protect your family in the future. The terms below can help you get to know more about term life insurance:
- What does it cost? Term life insurance is often the most affordable type of life insurance. Your monthly payment is mostly based upon personal health history, age, term and amount of coverage.
- How long is the term? Your policy's "term" is the set amount of time you have life insurance coverage at the same premium level. Typically, a term life insurance policy's term ranges from 10 to 30 years.
- What is term coverage? This is the payment amount your beneficiary will receive if you pass away while the policy is active. Your beneficiary can use this payment to help with housing and childcare costs or other expenses. Typically, this payment is tax exempt.1 See Term Life Insurance 101.
A term life insurance policy can often be renewed, or you can purchase a new policy, at the end of its term. You can convert your term life insurance to a permanent life insurance policy without needing a medical exam prior to the end of the conversion period. See Converting a Term Policy to a Permanent Policy.
Keep in mind that the longer you wait to convert your policy from term to permanent, the more expensive it may be. Because you become more expensive to insure as you age, if you purchase a policy in your twenties, your monthly premium will most likely be lower than those who purchase a policy in their fifties.
There are a variety of options available to help you customize your term life policy to fit your specific needs. Talk to an Allstate personal financial representative to learn more.