Family · Investments · Life Insurance

Term or Permanent Life Insurance?

Life doesn’t come with any guarantees… that’s why there’s life insurance. Life insurance can help provide financial security for the people you care about if you are gone.

If you pass away, a life insurance payment can help your loved ones cover medical bills, funeral costs, mortgage or rent, college tuition, and many other living expenses.

Life insurance policies typically fall into two categories: term insurance or permanent insurance. Which type of life insurance policy is right for you?

A term life insurance policy is like renting a home. You choose the length of time – the ‘term’ of the policy – and the amount of coverage, and your payments stay the same until the end of your term.

Once your term policy expires, you may have the option to renew your policy with higher premiums or apply for a new life policy. Some policies even allow you to convert to a permanent policy.

A permanent life insurance policy is more like buying a home. It offers lifelong protection, the ability to build cash value, and the flexibility to adjust your policy if needed.

With each payment you make to a permanent life insurance policy, part of your premium goes toward insuring your life, and part goes toward building cash value… that can be used to take out a loan, make a withdrawal, or even skip a payment. Loans or partial withdrawals can reduce the policy’s cash value and death benefit, increase the possibility of policy lapse and may result in a tax liability. Consult a tax advisor for more information on the tax treatment of loans or withdrawals from a life insurance policy.

Have questions about which life insurance policy is right for you? Contact a Colonial agent to answer all your questions!


All insurance products are subject to terms, conditions and exclusions not described here; we can answer any questions you may have.


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