Should seniors buy term or permanent life insurance?

CHICAGO – March 24, 2022 – (


iQuanti: As we age, we want to make sure our loved ones are taken care of when we’re gone. Life insurance can be a fantastic tool for seniors to provide their families with additional financial protection. It pays a death benefit when you die, which can provide your beneficiaries with increased financial security. But if you choose to go this route, you may not know whether you should buy term or permanent life insurance. In this article, we’ll explain how each type of life insurance policy works, then show you how to choose the best one. life insurance quote for your needs.

What is term life insurance?

Term life insurance is a type of life insurance policy that provides coverage for a set period, usually 10 to 30 years. If you die during the term of the contract, your insurer will pay the death benefit to your beneficiaries. But keep in mind that if you outlive the term of the policy, you will need to purchase a new policy to continue your coverage. Term life insurance tends to have more affordable premiums than permanent life insurance.

What is permanent life insurance?

Permanent life insurance provides guaranteed coverage for life as long as you stay current on your premium payments. In addition, a portion of each premium payment is allocated to a cash value growth component. Your cash value increases tax-deferred at a specific rate that varies by policy type. Once you have accumulated enough cash value, you can:

  • Remove: Withdrawals may reduce your death benefit and be taxable.
  • Borrow against it: You can get a low rate loan with no credit check or deadline. Interest is added to your outstanding balance, and the loan cannot exceed the remaining cash value or your policy will expire.
  • Pay premiums: Some permanent life insurance policies allow you to pay premiums with your cash value.
  • Surrender of your policy: If you surrender your permanent life insurance policy, you will get its cash value minus the surrender charge.

There are several types of permanent life insurance, including:

  • Whole life insurance: Whole life policies come with fixed premiums and a death benefit. The cash value grows at a fixed, guaranteed interest rate.
  • Universal life insurance: This type of life insurance policy has a death benefit and adjustable premiums. The cash value increases with current interest rates and you may be able to pay premiums with it.
  • End-of-stay expense insurance: End-of-life expense insurance is a small, whole-life insurance policy with a death benefit large enough to cover end-of-life expenses, such as funeral expenses. This policy may be cheaper and easier to qualify than whole life, but has a smaller death benefit. The cash value grows at a fixed, guaranteed interest rate.
  • Variable life insurance: Similar to whole life insurance, variable life insurance has level premiums and death benefits over the life of the policy. You can invest your cash value in stocks, bonds and other securities for greater growth potential, but you are not protected by a minimum rate guarantee.

How to choose between term life insurance and permanent life insurance for seniors

Term life insurance and permanent life insurance can each work well for seniors in different situations. If you want to create a financial cushion for your loved ones, cover mortgage payments and save on premiums, a term life insurance policy could be the answer. Since policyholders typically pay lower premiums for these types of plans compared to whole life insurance, you’ll have more funds available for other expenses if you choose to go this route.

But getting a permanent life insurance policy can be worth it if you want guaranteed lifetime financial protection for your loved ones. You won’t have to worry about renewing your policy if you live long after buying it. Permanent policies can also be great tools if you have complex financial plans thanks to the cash value component, which can potentially help you grow your wealth.

Ultimately, seniors should assess their budget, factors that may affect life expectancy, and life insurance needs before deciding on a type of policy. Then they should research multiple life insurance quotes to get a policy that exactly meets their needs.

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Should seniors buy term or permanent life insurance?

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