Permanent Versus Term Life Insurance Explained

Why life insurance matters

Life insurance provides essential financial protection for your loved ones in the event of your death. If you were to pass away unexpectedly, life insurance may help ensure your family can maintain their lifestyle and meet financial obligations. According to industry data, nearly half of U.S. households would feel the financial impact of losing their primary wage earner within just six months. 40% say their loved ones would be barely or not at all financially secure should the primary wage earner die unexpectedly.¹

Choosing the right type of life insurance – permanent life insurance or term life insurance, is key to helping secure your family’s future.

What is term life insurance?

Term life insurance offers coverage for a specific period, typically 10, 20 or 30 years. You pay premiums during the term, and if you pass away within that time, your beneficiaries receive the death benefit. Once the term ends, the coverage expires and you stop paying premiums.

Why choose term life insurance?

•  Term life is generally the most budget-friendly option.
• Temporary needs. Ideal for covering short-term financial responsibilities like:
  1. Mortgage or debt repayment.
  2. Children’s education.
  3. Income replacement during working years.

If your financial obligations will decrease over time, term life insurance may be the right fit.

Learn more about term insurance from Ameritas or get an instant quote to see how affordable term can be for you.

What is permanent life insurance?

Permanent life insurance provides lifelong coverage. Unlike term policies, it doesn’t expire as long as premiums are paid. It also includes a cash value component that grows over time and can be accessed for various financial needs.

Benefits of permanent life insurance:

• Lifetime protection. Coverage that lasts your entire life.
• Cash value growth. Builds tax-deferred savings you can use for:
• Retirement income.
• College tuition.
• Emergency expenses.
• Starting a business.

Permanent life insurance offers flexibility and long-term financial planning advantages.

Types of permanent life insurance

Whole life insurance

• Guaranteed premiums, death benefit and cash value.*
• Potential to earn dividends.

Universal life insurance

• Flexible premium amount and frequency.
• Adjustable coverage levels.

Indexed universal life insurance

• Cash value growth tied to a market index.
• Built-in protection against market downturns.

Explore Ameritas permanent life insurance options to find the right fit for your goals.

The cost of waiting

Buying life insurance early can save you money. Premiums are lower when you’re younger and healthier. With permanent life insurance, starting sooner also means building cash value earlier, giving you more financial flexibility down the road.

Term vs. permanent life insurance

Choosing between permanent life insurance and term life insurance depends on your financial goals, budget and stage of life. Term life may be ideal for temporary needs, while permanent life insurance supports long-term planning and wealth-building.

Have more questions about term life insurance versus permanent life insurance? Contact a financial professional to learn more.

¹2025 Facts About Life Insurance Sheet

Disclosures

*Guarantees are based on the claims-paying ability of the issuing company. Policies, index strategies and riders may vary and may not be available in all states.

Loans and withdrawals will reduce the policy’s death benefit and available cash value. Excessive loans or withdrawals may cause the policy to lapse. Unpaid loans are treated as a distribution for tax purposes and may result in taxable income.

Representatives of Ameritas do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your specific situation.

In approved states, life insurance is issued by Ameritas Life Insurance Corp. In New York, life insurance is approved by Ameritas Life Insurance Corp. of New York.

Policies, index strategies and riders may vary and may not be available in all states. Optional riders may have limitations, restrictions, and additional charges.