What is permanent life insurance? (2025)
Permanent life insurance provides a guaranteed payout to your beneficiaries and includes a cash value component that can be invested and borrowed against. Compare whole, universal, and variable policies to find the best coverage. Permanent life insurance quotes start at $110 per month.
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Updated September 2025
Permanent life insurance is a type of life insurance that provides coverage for your entire life, as long as you continue to pay the required premiums. Unlike term life insurance, which expires after a set number of years, a permanent life insurance policy is designed to last a lifetime and includes a built-in savings component known as cash value.
- Permanent life insurance is also known as whole life insurance
- It is the only type of life insurance that earns cash value
- Whole life is more expensive than term life, starting at $110 per month
This makes permanent life insurance both a protective tool for your loved ones and a long-term financial asset that grows over time. Universal life, indexed universal life, and variable universal life are three types of permanent life insurance. Keep reading to compare policies or enter your ZIP code to compare free life insurance quotes.
How Permanent Life Insurance Works
When you purchase a permanent life insurance policy, you agree to pay premiums, either on a fixed or flexible schedule, throughout your lifetime. In return, the insurer guarantees a death benefit payout to your beneficiaries whenever you pass away. This is why permanent policies are also called whole life insurance, since coverage lasts for your whole life.
A portion of your premiums also goes into a cash value account, which grows tax-deferred. This cash value can be accessed while you’re still alive, offering a layer of financial flexibility that term life policies don’t provide. Other key benefits permanent policies offer include:
- Lifelong Coverage: The policy never expires as long as premiums are paid.
- Cash Value Accumulation: A portion of each premium builds savings that can be accessed while you’re alive.
- Policy Loans and Withdrawals: Borrow against your policy’s cash value without credit checks or tax penalties (if structured properly).
- Premium Flexibility: Depending on the type, you may be able to adjust how much and when you pay.
- Customizable Death Benefit: Some policies allow you to increase or decrease the payout amount based on your needs.
As long as the policy stays in good standing and premiums are paid, your coverage remains active for life. Start comparing quotes from the best life insurance companies to find affordable permanent life insurance near you.
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Permanent Life Insurance Cost Comparison
Term vs. Whole Life Insurance Monthly Rates by Age & Gender
| Age & Gender | 20-Year Term | Whole Life |
|---|---|---|
| 20-Year-Old Female | $13 | $110 |
| 20-Year-Old Male | $16 | $130 |
| 30-Year-Old Female | $18 | $145 |
| 30-Year-Old Male | $22 | $165 |
| 40-Year-Old Female | $30 | $220 |
| 40-Year-Old Male | $38 | $250 |
| 50-Year-Old Female | $55 | $350 |
| 50-Year-Old Male | $67 | $395 |
| 60-Year-Old Female | $105 | $520 |
| 60-Year-Old Male | $120 | $590 |
| 70-Year-Old Female | $170 | $750 |
| 70-Year-Old Male | $195 | $830 |
The Four Main Types of Permanent Life Insurance
Permanent life insurance stands apart from term policies because it not only provides lifelong coverage but also builds cash value over time. Universal, indexed, and variable life insurance are the only types that combine a death benefit with a savings or investment component.
Cash Value Life Insurance Policy Comparison| Policy | Growth | Flexibility | Control | Risk | Use Case |
|---|---|---|---|---|---|
| Whole Life | Fixed, guaranteed | Fixed premiums | None | Low risk | Long-term stability |
| Universal Life | Flexible, interest-based | Adjustable premiums | Minimal control | Moderate risk | Flexible savings + cover |
| Indexed UL | Tied to market index | Flexible within limits | Limited to index | Capped risk | Growth with protection |
| Variable Life | Market-based accounts | Fully flexible | Full sub-accounts | High risk | High growth, more risk |
Each policy type offers a different level of flexibility and risk, with universal life allowing adjustable premiums, indexed life tying growth to a market index, and variable life offering direct investment options. Working with a financial advisor can help you determine which types of permanent life insurance match your goals.
Read More: How Much Life Insurance You Need
Whole Life Insurance
This most basic type of permanent life insurance policy provides a guaranteed death benefit as long as premiums are paid. Premiums are fixed, starting at $110 per month, and won’t increase as you age or if your health deteriorates. A portion of your premiums is invested in the policy’s cash value, which grows at a fixed rate determined when you buy the policy.
Universal Life Insurance (UL)
What is universal life insurance? Universal permanent life offers flexible premiums and death benefits that you can increase or decrease over the life of the policy based on your needs and goals. A portion of your premiums is invested into the cash value, as well as any interest earned. Interest rates are set by the insurance company.
Indexed Universal Life (IUL)
Universal life policies are more suitable for those who want more control over their premiums and are actively involved in their investment portfolios. Indexed UL has a cash value that’s tied to a stock market index of the policyholder’s choosing, and it includes downside protection so your policy won’t lose value if the market drops.
Variable Life Insurance
Variable life insurance allows policyholders to invest in sub-accounts similar to mutual funds, and the cash value and death benefit fluctuate with investment performance. These policies carry a higher risk, so they’re best for experienced investors looking to complement an existing life insurance policy or 401(k).
Permanent Life Insurance vs. Term Life Insurance
The main difference between whole life insurance vs. term life is how long the coverage lasts and whether the policy includes a cash value component.
Term life insurance is usually better for those who want affordable coverage for a specific period, such as while paying off a mortgage or raising children. Permanent life, on the other hand, is ideal for those who want lifelong coverage, are planning their estate, or want to build savings alongside protection.
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Permanent Life Insurance Pros and Cons
Pros:
- Coverage lasts your entire life
- Builds tax-deferred savings
- Can supplement retirement income via loans or withdrawals
- May be used for estate planning or wealth transfer
Cons:
- Significantly more expensive than term life
- Can be complex to understand and manage
- Early cash value growth may be slow
- Fees and surrender charges can apply if canceled early
Who Should Consider Permanent Life Insurance
Permanent life insurance offers a unique blend of lifetime protection and financial growth potential. One or more of the four types of permanent life may be a good fit if you:
- Want to leave a guaranteed inheritance
- Have long-term financial dependents, such as a child with special needs
- Need life insurance as part of an estate or business succession plan
- Are looking for tax-deferred savings in addition to death benefit protection
- Can afford the higher premiums and want lifetime coverage
It’s not the right fit for everyone, but it can be a powerful tool if you need long-term coverage, want to build tax-deferred wealth, or have specific estate planning goals. We make it easy to compare permanent life insurance quotes and explore the policy types that work best for your needs. Use our free comparison tool and start your search today fr the best permanent life insurance.
Frequently Asked Questions
Is permanent life insurance worth it?
It depends on your goals. Permanent life insurance is worth considering if you need lifelong coverage, want to build cash value, or are looking for estate planning solutions. However, it may not be the best choice if you just want affordable coverage for a specific period.
Can I convert term life insurance to permanent?
Yes, many term policies include a conversion option that allows you to switch to a permanent policy—often without a medical exam—within a set time frame. This can be a great way to secure lifetime coverage if your needs change.
What happens to the cash value when I die?
In most cases, the insurance company keeps the remaining cash value, and only the death benefit is paid to your beneficiaries. However, some policies offer riders that allow your beneficiaries to receive both, though they often come at a higher cost.
Do I pay taxes on the cash value?
No taxes are due on the cash value while it grows inside the policy. However:
- Withdrawals may be taxable if they exceed the premiums you’ve paid
- Loans are generally tax-free unless the policy lapses or is surrendered
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