Richard Storelee, Insurance Agent By Day... Permanent Life Insurance: Like term life insurance, permanent life insurance also pays out benefits if you die. In addition, they have what is called a "savings account," which is also referred to as "cash value" so that if you live past the date specified in your policy, you could still get some of your premiums back. You get this money back by either cashing in the policy or by borrowing against it. Permanent insurance premiums are more expensive than term insurance premiums, due to the fact that some money can be put into a savings program to be used later. The longer the policy has existed, the higher the cash value in the savings program will be because more money has been paid in overtime and principle has received interest, dividends, or both. The gain is tax-deferred if the policy is cashed in during your life. And if you die, the proceeds are usually tax-free to your beneficiary. If you plan on keeping the policy for more than 20 years, permanent insurance is your best bet. Next month's series of short articles will discuss the different types of permanent life insurance: whole life, universal life, and variable life insurance, so tune back in soon.