Term vs Permanent Policy

A simple analogy is:

• Term Life Insurance = Leasing a Home

• Permanent Life Insurance = Buying a Home

Leasing a Home ↔ Term Insurance

• You pay for the right to use it for a specific period.

• Monthly payments are usually lower.

• When the lease/term ends, you no longer have coverage or ownership rights unless you renew.

• You don't build equity or cash value.

Example: Leasing an apartment for 3 years is like buying a 20-year term life policy. Protection exists only during the agreed period.

Buying a Home ↔ Permanent Insurance

• Monthly costs are generally higher.

• You build equity (similar to the cash value in a permanent life policy).

• The benefit continues as long as you maintain it.

• It can become a long-term asset.

Example: Buying a house and building equity over decades is similar to a whole life policy accumulating cash value while providing lifelong coverage.

One-Line Summary

Term insurance is like renting protection; permanent insurance is like owning protection.