Term
Coverage for a set period — often ten, twenty, or thirty years. If death occurs during the term, the benefit is paid; otherwise the contract ends. The initial cost is low because the probability of a claim over the period is low.
Permanent
Lifelong coverage, as long as the scheduled premiums are paid. The initial cost is markedly higher, because the insurer knows a benefit will eventually be paid. Some contracts provide for premiums payable over a limited period.
Cash value
Many permanent contracts accumulate a value you can access — surrender, policy loan, pledge. Term accumulates none. That value is not an investment in the ordinary sense, and its tax treatment has its own rules.
What renewing term costs
At the end of the term, a renewable term policy continues automatically, but at a rate based on your attained age. The increase is often steep. It is the most frequent surprise for a long-standing insured.
The need decides the length
A need that ends — a mortgage, dependent children, a temporary business partnership — matches term. A need that does not end — costs at death, latent tax on assets, a planned bequest — matches permanent.
Combinations are the norm
Many situations are covered with a modest permanent base plus a larger term layer over the years of peak responsibility. A registered advisor calculates the split against your actual obligations.
What neither does
Neither covers disability or critical illness. Those are separate protections, with their own definitions and their own contracts.
No rate, price, or recommendation on this page. Amounts and limits change: verify them with official sources before deciding.