Guide
Term vs. permanent life insurance
What each kind is for, what it costs, and why most families start with term.
Term life insurance provides a set death benefit if you die within a specific timeframe—typically 10, 15, 20, 25, or 30 years—and your premium stays the same throughout the period. After the term expires, the coverage ends unless you choose to renew, at which point the rate becomes significantly more expensive. For the majority of households, term coverage is the most affordable method to secure a substantial benefit during the years when family needs are greatest.
Permanent life insurance (which includes whole life, universal life, and related products) is structured to cover you for your entire lifetime and accumulates a cash value component within the policy. Monthly premiums are substantially higher than term for an equivalent death benefit, and the cash value accumulates gradually in the early years. It is appropriate for people facing permanent obligations: a family member who will always depend on support, the need to have liquid assets to cover estate taxes, or a business transition plan.
How to choose
Begin with the obligation itself, not the insurance product. When the need is temporary—a loan that will be repaid, children who will grow up—term insurance aligns precisely with that timeframe. When an obligation is truly permanent, permanent insurance or a term policy that includes a conversion option may be the right choice. Several carriers allow you to convert a term policy to permanent coverage without repeating underwriting, provided you do so within a defined window; the comparison tool on this site displays each carrier's conversion details.
What people in Palo Alto often do
A widely adopted strategy involves selecting a 20- or 30-year term policy matched to the household's genuine financial obligations, then revisiting it as your life unfolds and circumstances shift. This approach keeps the monthly payment reasonable so you can buy enough coverage for the years when it counts, which is the central goal. Susman Insurance Agency is available to explore permanent coverage if your situation includes a need that will not end.