If you're considering buying life insurance to protect your loved ones from the possibility of your premature demise, you might be wondering about the difference between term life insurance and various types of permanent life insurance. The differences are pretty easy to sum up, and you should know the life insurance options available to you before committing to a policy, but you should know this too: most experts agree that if you're young, term life insurance is probably the best way for you to go.

Term life insurance very simple: you pay a fixed amount of money, (known as the 'premium'), each month, and in return you are assured that your loved ones (your 'beneficiaries') will receive a defined payout amount from the insurance company in the event that you pass away during the term of the policy (hence the name). Usually these policies are taken for a period of decades-20 or 30 years is not unusual. The critical thing to understand about term life is that should you outlive your policy the insurance company is obligated to pay out nothing. If this sounds like an unfair arrangement, you should know a couple of things. First, you are statistically very likely to outlive your term policy, and second, for this reason insurance companies can offer term coverage with extremely low monthly premiums relative to the size of the payout amount that one is buying.

Permanent life insurance on the other hand, is usually much more expensive than term, mostly for the reason that a payout is guaranteed with it, no matter how long you live, assuming you keep it paid up. Insurance companies over time have added features to permanent policies that have them resembling investments as much as insurance. While this sounds attractive, the fact is that most unbiased insurance experts would point to a much higher premium payments as prohibitively unattractive. It's probably better to get simple term coverage, and try to save as much as you can work your own investment portfolio, rather than the 'convenience' of having coverage also function as a retirement plan.

While there is quite a lot to educate yourself upon regarding the basics of life insurance, don't feel overwhelmed. Talk to a financially savvy relatives and they will most likely point you in the direction of term life. It's a very good combination of coverage that doesn't have to leave you financially strapped each month.

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If you’re someone who is in their early to mid twenties and in good health you won't have any issues getting life insurance.  However, if you’re someone who is sixty or older you might have a tough time getting life insurance and if you do get it you might have to pay an arm and a leg to have it.

So what is the best life insurance for elderly people?

In this article I will be covering the two main kinds of life insurance available to elderly people, permanent life insurance and term life insurance.

Permanent Life Insurance

Back in the days when I worked with World Financial Group, better known as WFG, permanent life insurance was the main type of insurance I sold.  The main reason being most of my clients were younger.

Being younger has its advantages.  With permanent life insurance they could get a cheaper premium on the policy and by the time they retired they would have enough money built up inside the cash value that the policy run efficiently on its own without you contributing to the policy anymore.

This gives you the advantage of owning a life insurance policy without having to keep throwing more money into it.  It also means you'll also get to use what you paid for in the first place, a death benefit to take care of your family’s financial situations when you pass on.

Term Life Insurance

Term life on the other hand is not permanent.  Term will only last for a specific amount of time, usually 5 to 30 years.  Term is also cheaper than a permanent policy because they have no cash value and that you only pay for what you need.  For example if you need a cheap policy to get by a 5 year term policy will be the cheapest.

If you need a policy for a longer period of time, go with a 30 year policy.  However, the 30 year term policy will be more expensive than 5 year term policy, but on an apple to apples comparison a permanent policy will always be more expensive than a term.

So What Should You Get

If you’re over 60 and have no life insurance get the term policy.  It will be cheaper than the permanent policy.  Also make sure you talk a professional insurance agent as he will be able to price out which type of term is better suited for you.

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