Permanent life insurance
Coverage that doesn't expire — the right tool for permanent needs, the wrong one for temporary ones.
Life insurance designed to cover you for your entire life, as long as premiums are paid — the category that includes whole life, universal life, and Term-100.
The umbrella term
Permanent life insurance is the broad category of coverage built to last your whole life rather than a fixed term. It includes whole life, universal life, and Term-100, among others. What unites them is that, provided the policy stays adequately funded, the death benefit will eventually be paid whenever you die, rather than expiring on a birthday the way term coverage does.
Most permanent policies also carry a cash value component that accumulates over time on a tax-advantaged basis, though the exception, Term-100, typically builds little or none. This combination of lifelong protection and, in most cases, cash accumulation is why permanent insurance costs substantially more than term for the same face amount.
When permanent coverage earns its cost
Permanent insurance fits genuinely permanent needs: covering final expenses, funding an estate, equalizing an inheritance, insuring a tax liability that will exist at death, or backing a business agreement. In those cases the certainty of lifelong coverage is exactly the product you want, and the higher premium buys something term cannot.
It is a poor fit for temporary obligations, such as replacing income while children are dependent or covering a mortgage that will be gone in twenty years. For those, term insurance delivers far more coverage per dollar. The classic error is buying a small permanent policy for a large temporary need because the monthly cost looks affordable, and ending up badly underinsured. Match the product to the duration of the need.
Common questions
What's the difference between permanent and term life insurance?
Term covers a fixed period and then ends, with no cash value and a much lower cost. Permanent is built to last your whole life and usually builds cash value, at a substantially higher premium. Permanent suits lifelong needs; term suits temporary ones like income replacement or a mortgage.
Does all permanent life insurance build cash value?
Most does — whole life and universal life accumulate cash value over time. Term-100 is the main exception, offering permanent coverage with little or no cash value in exchange for a lower cost than full whole life.