Permanent life insurance does not have a set expiration date; it provides coverage for the insured's lifetime as long as premiums are paid. Unlike term insurance, which ends after a defined period, permanent policies remain in force until death, a specified maturity age, or non‑payment of premiums.
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Key Features of Permanent Life Insurance
Permanent policies combine a death benefit with a cash value component that grows tax‑deferred over time. The cash value can be borrowed against, withdrawn, or used to pay premiums, but outstanding loans reduce the death benefit.
When Coverage Can End
Even though the policy is designed to last a lifetime, it can terminate under certain conditions:
- Non‑payment of premiums: If the cash value is insufficient to cover missed payments, the policy may lapse.
- Policyholder age limits: Some contracts include a maturity age (often 100 or 121) after which the policy may end, paying out the cash value.
- Policy surrender: The owner may voluntarily surrender the policy for its cash surrender value.
Comparing Term and Permanent Policies
| Aspect | Term Life | Permanent Life |
|---|---|---|
| Coverage period | Fixed term (e.g., 10‑30 years) | Lifetime (until death or policy end) |
| Premiums | Usually lower, fixed | Higher, may vary with cash value |
| Cash value | None | Accumulating, can be accessed |
Maintaining the Policy
To keep a permanent life policy active, ensure premiums are paid or that the cash value is sufficient to cover any lapses. Regular reviews with a financial advisor help align the policy with changing needs and prevent unintended termination.