How does permanent life insurance differ from term life insurance?

Permanent life insurance is designed to provide coverage for the entirety of the policyholder's life, as long as the premiums are paid. This type of insurance not only offers a death benefit to beneficiaries but also accumulates cash value over time, which can be accessed during the policyholder's lifetime.

In contrast, term life insurance is structured to provide coverage for a specific period, usually 10, 20, or 30 years, and does not build cash value. It is typically less expensive than permanent life insurance but lacks the long-term benefits associated with permanent policies.

Some options erroneously state characteristics of term life insurance as attributes of permanent life insurance, thereby clarifying the unique qualities that make permanent life insurance suitable for those seeking lifelong financial protection and an investment component.