What is a permanent policy?

Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states.
After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in…

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Written by



Rachael Brennan

Licensed Insurance Agent

Benjamin Carr was a licensed insurance agent in Georgia and has two years’ experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by



Benji Carr

Former Licensed Life Insurance Agent

UPDATED: Jan 11, 2022

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Quick Facts

Permanent life insurance provides lifelong coverage
The most common types of permanent life insurance are whole life insurance, universal life insurance, variable universal life insurance, and variable life insurance
Permanent policy rates are higher than term life insurance rates, but your rates will vary depending on which type of permanent life insurance you purchase

When it pertains to buying life insurance, permanent policies are some of the most common policy types available.

There are many different permanent life insurance types that offer lifelong coverage with varying benefits.

But what exactly is permanent life insurance and how does it differ from other types of life insurance?

In this guide, we’ll review everything you need to know about permanent policies and determine if a permanent policy is the right fit for you.

Looking for an affordable permanent policy? Enter your ZIP code to obtain free permanent policy quotes from the best companies in your area.

What is permanent life insurance?

Permanent life insurance is a type of insurance that offers lifelong coverage.

There are many different types of permanent life insurance and each policy has varying rates, benefits, disadvantages, and restrictions.

The most common type of permanent life insurance available is whole life insurance, but some other types include universal life insurance, variable universal life insurance, and variable life insurance.

Permanent life insurance can be expensive, but permanent policies provide more coverage and offer a wide variety of benefits that term life insurance doesn’t.

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How much does permanent life insurance cost?

The cost to purchase a permanent life insurance policy will vary depending on which policy you buy. For example, buying a universal life insurance policy is often less expensive than purchasing a standard whole life insurance policy.

Aside from the type of policy you purchase, additional factors that can affect your rates are your age, your health status, your lifestyle, your profession, and your gender.

For example, a healthy 25- to 35-year-old non-smoking male would pay $27-$31 a month on average for a $500,000 term life insurance policy.

However, the same person buying a $500,000 whole life insurance policy would pay $350-$520 a month on average.

What are the main differences between permanent life insurance and term life insurance?

Regarding term versus permanent life insurance, it’s important to compare different policies and determine which one best matches your budget and coverage needs.

Term life insurance offers coverage for a set period of time before the policy expires. Typically, most term life insurance policies last between 10-30 years, but there are some that offer coverage for either a minimum of 5 years or a maximum of 40 years.

After the coverage period has ended, you will need to either convert your policy, renew your policy, or purchase another policy if you want to continue your coverage.

Term life insurance doesn’t have a cash value so it isn’t very useful for things like estate planning, but it is considerably less expensive than most permanent life insurance options.

By contrast, permanent life insurance provides coverage that lasts a lifetime, so you won’t need to renew or convert your policy.

Although permanent life insurance is more expensive to purchase, permanent policies also have additional benefits including a cash value, flexible payment options, and fixed rates.

Permanent life insurance also tends to be a more predictable policy than term life insurance.

However, because there are several different types of permanent life insurance, benefits will vary by policy.

Should I buy permanent life insurance?

Permanent life insurance is a good option for most people to consider.

However, the type of policy that will fit you best will depend on your budget and your coverage needs.

Permanent life insurance policies are good for individuals that want lifelong coverage with long-lasting benefits.

Permanent life insurance is generally more expensive, so you’ll have to consider your budget when deciding whether permanent life insurance is the right fit for you.

If you want permanent coverage but can’t currently afford to buy a permanent policy, convertible term life insurance is worth considering if you know that you’ll be able to afford a permanent policy in the future.

Although convertible term life insurance is a type of term life insurance, this policy allows you to convert to a permanent life insurance policy before your coverage period expires.

Permanent life insurance is a good option for most people to consider, but if you’re looking for a simple, short-term policy, term life insurance may be a better option for you.

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What’s the bottom line on permanent life insurance?

Permanent life insurance offers lifelong coverage without the need to renew your policy.

Although permanent life insurance is more expensive to purchase than term life insurance, permanent policies generally have more benefits and higher coverage.

If you’re considering buying a permanent policy, comparing policies and rates can help you find the best option for you.

Before you purchase a permanent policy, enter your zip code to obtain free quotes from the best permanent policy companies in your area.