What is permanent life insurance?

Permanent life insurance is a type of insurance that:

  • Remains in force your entire lifetime as long as you pay the required premiums.
  • Pays a death benefit to your beneficiaries upon your passing, providing them with financial support.
  • Builds cash value over time, creating a potential financial benefit for you alongside the death benefit protection.

Table of Content

Permanent life insurance (Noun) is a type of life insurance that provides coverage throughout your lifetime and accumulates a cash value over time.

Key Takeaways

  • Permanent life insurance: Offers both protection for your loved ones and the potential to build wealth through a cash value component.
  • Cost: Generally higher than term life due to the cash value benefit, but consider long-term value and potential uses.
  • Rates: Premiums can vary depending on factors like age, health, and coverage amount. Carefully compare quotes to find the best value.

While the term "permanent life insurance" itself may not be formally defined everywhere, some states now explicitly define and use it in their legislation, like Florida Senate Bill CS/CS/SB 1564 from 2020. However, the meaning is widely understood across the insurance industry and amongst consumers.

Contractual Language vs. Plain Language:

  • Life insurance companies primarily use precise legal language in their agreements, which may differ from terms commonly used by consumers.

The term "permanent life insurance" is rarely used in these contracts because some policies can mature (end their coverage period) while the insured is still alive, resulting in a payout and termination of the policy. However, not all matured policies automatically end.

Maturity Age in Life Insurance Policies: Historical Changes

Historical Period Typical Maturity Age
Before 2017
95 or 100 years
Present Day 120 or 121 years

Key Points:

  • The term "permanent" likely developed to distinguish policies offering lifelong coverage from those with limited terms (term life).
  • While individual states hold primary responsibility for insurance regulation in the US, the generic use of "permanent life insurance" is widely recognized.
  • Some states now explicitly incorporate the term in their legislation.


  • Look for terms like "maturity" in your life insurance contract instead of "permanent life insurance."
  • Check your specific policy contract to understand what happens at maturity. It will specify the age and any potential actions or consequences triggered by maturity.

Permanent life insurance, unlike term life insurance, provides lifelong coverage as long as premiums are paid. It offers two key benefits:

1. Death Benefit: This is a guaranteed payout to your beneficiaries upon your passing. It can offer financial security and help loved ones cover expenses like funeral costs, mortgage payments, or living expenses.

2. Cash Value: This component allows you to build wealth over time. A portion of your premiums goes towards this value, which grows tax-deferred. You can access this money through withdrawals, loans, or by using it to pay future premiums.

Key Features:

  • Guaranteed Premiums: Depending on the type of policy, you may have guaranteed premiums that remain constant throughout the policy term.
  • Cash Value Growth: The cash value generally grows at a fixed rate (for Whole Life) or based on investment performance (for Universal Life).
  • Tax Advantages: The cash value grows tax-deferred, and the death benefit is generally tax-free to your beneficiaries.
  • Flexibility: Some policies offer flexibility in terms of premium payments and death benefit amounts.

Types of Permanent Life Insurance:

  • Whole Life: Guaranteed premiums and death benefit, predictable cash value growth, simpler structure.
  • Universal Life: Flexible premiums and death benefit, potential for higher cash value growth, more control over investment options.
  • Variable Universal Life: Highest potential returns, but also the highest risk due to investment in market-linked sub-accounts.


  • Lifelong coverage: Provides peace of mind knowing your loved ones are protected financially.
  • Cash value accumulation: Offers a potential savings tool for retirement or other needs.
  • Tax advantages: Can be a tax-efficient way to build wealth.
  • Supplemental benefits: Some policies offer additional benefits like long-term care riders.


  • Cost: Generally higher than term life due to the cash value component.
  • Complexity: Some policies have more complex features and require more understanding.
  • Suitability: Not a one-size-fits-all solution. Consider your individual needs, goals, and risk tolerance.

Permanent Life Insurance FAQs

What is a drawback to permanent life insurance?

Higher cost: Compared to term life, permanent life generally has higher premiums due to the cash value component.

At what age should you get permanent life insurance?

There's no specific age, but younger and healthier individuals typically get better rates. Consider your financial goals and need for lifelong coverage.

Can permanent life insurance be cashed out?

Yes, but with limitations. You can access the cash value through withdrawals or loans, but it may impact your death benefit and future premiums.

Do you get money back from permanent life insurance?

Yes, in some cases. Some policies offer return of premium features built-in or through optional riders. These features may return all or a portion of your premiums under specific conditions.

Why do people buy permanent life insurance?

For lifelong protection and the opportunity to build wealth through the cash value component.

How long does permanent life insurance last?

As long as premiums are paid, permanent life insurance provides coverage throughout your lifetime.

What age is too late to get life insurance?

It's difficult to say definitively. While most companies offer term life insurance up to a certain age (often 70 or 75). While some permanent life options might be available up to age 85, others may have lower age limits. It's crucial to check with individual companies for their specific eligibility criteria. Remember, it's better to get coverage earlier as premiums typically increase with age.

How much does 100,000 in life insurance cost?

The cost varies significantly based on age, health, policy type, and company. Get quotes from different providers for accurate estimates.

Is permanent life insurance a good idea?

It depends on your individual needs and goals. Consider factors like budget, desired coverage, and long-term financial plans. Consulting a financial professional is recommended.