The essentials · 3 min read
Term or permanent life insurance?
THE SHORT ANSWER
What is the difference between term and permanent cover?
Term life insurance covers a specified period. Permanent life insurance is designed to last for life if its funding and other contractual conditions are met, and may include cash value. The word permanent does not mean the policy cannot lapse.
Match the duration to the purpose
A time-limited commitment and a lifelong objective are different starting points. Write down why you want insurance before comparing product names. Ask what happens at the end of a term and whether any continuation options require fresh underwriting.
Ask which figures are guaranteed
If a policy includes cash value, distinguish contractual guarantees from illustrations. Ask for a clear explanation of charges, surrender terms, required payments and how performance affects the policy. A death benefit and an accessible cash value are not the same thing.
Make the payment commitment understandable
Whole life and universal life are different forms of permanent insurance. Payment schedules and guarantees vary. Flexible payments do not remove the need to fund the policy: inadequate funding can cause cover to lapse. Ask what must be paid to maintain cover and what happens if assumptions change.
Keep the comparison on one page
Create two columns and record the duration, payment basis, cash-value features, renewal rights and the reason you are considering each option. Take any unanswered points into your adviser conversation.
MAKE IT PRACTICAL
Questions to take with you
- How long do I want the protection to last?
- What happens when the term ends?
- Which values and payments are guaranteed?
- What happens if I stop paying?
- Does the product serve the purpose I wrote down?
This guide is general information, not a personal recommendation or legal or tax advice. Confirm your eligibility and policy terms with the insurer.
Prepared and source-checked with AI assistance. This is not an independent professional review. Read our editorial policy.
Updated 28 October 2026: Added the funding and lapse conditions for permanent cover and distinguished whole life from universal life.
Sources & further reading
Sources checked 28 October 2026. Product terms can change. UK and US consumer resources provide general education, not advice about the rules in your country.
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