Permanent Life Insurance has a wide array of options built into the policy, but the basic concept is to provide a policy which will be in-force for the life of the insured. Because this type of policy typically has a permanent, constant, level premium, it will be considerably more expensive than term insurance. It will however have an additional benefit since a portion of the annual premium will be used to fund a cash value account, which can be used for various purposes including supplementing retirement income, paying off a mortgage, funding a college education or meeting a variety of other financial needs.

The cash value growth of a permanent policy is tax deferred. You do not pay taxes on the cash value increases until the growth exceeds the premiums paid.

The cash value earned and borrowed from a permanent life insurance policy can be used to help with emergency expenses, college funding, or retirement income. Policy loans reduce cash values and death benefits, and may be subject to other charges outlined in the policy.