What is the main difference between permanent and temporary life insurance?

The main distinction between permanent and temporary life insurance lies in the duration of coverage. Permanent insurance is designed to provide lifetime coverage for the insured, meaning it remains active as long as the premiums are paid, regardless of the age of the policyholder. This type of insurance also typically accumulates cash value over time, which can be borrowed against or cashed in under certain circumstances, adding another layer of long-term financial benefit.

In contrast, temporary insurance, often referred to as term insurance, provides coverage for a specific period, such as 10, 20, or 30 years. Once the term expires, the insurance ends, and there is no cash value accumulated. Therefore, understanding the lifelong nature of permanent insurance is crucial for individuals looking for enduring financial protection for their loved ones, as opposed to the more limited scope of temporary insurance.