When deciding on the type of life insurance you need, it is important to compare term vs. permanent life insurance in order to select the one that is best for you. Each of these policies has pros and cons associated with them, so it is important to consider your personal life situation and needs when deciding between term vs. permanent life insurance.

A term life insurance policy is in place for only a pre-determined amount of time. Although the most common terms associated with these policies are10, 15, 20 and 30, it is possible to purchase a term policy for just one year or for as long as 30 years. It is also sometimes possible to purchase a term life insurance policy that will remain in place until you reach a predetermined age. After this period of time is over, your policy is no longer in place.

When you purchase a permanent life insurance policy, on the other hand, it remains in place until you pass away. In addition, a permanent life insurance policy builds cash value that you can borrow against. Therefore, this type of insurance policy is a good choice if you are interested in taking advantage of the tax deferred savings component.

While permanent life insurance offers cash value and will remain in place forever, it is more costly to purchase than term life insurance. At the same time, the premium you pay when you start the policy remains the same for the life of the policy. Therefore, while it may be more costly at first, it may ultimately be less costly as the costs of life insurance go up over time.

If you are looking to have cheap life insurance coverage in place that will help you get through a particular period in your life – such as while your children are still dependent upon you – term life insurance may be right for you. Otherwise, permanent insurance may be a better option.