The reason is simple: the monthly premiums which you pay for term life insurance are a fraction of what you’ll pay for the various kinds of so-called “permanent” life insurance, like whole life, universal life, variable universal, etc. As term insurance covers you for a given period of time (the term), the life insurance company is not obligated to pay out anything should you outlive your policy. It turns out that statistically you are very likely to have that happen, and this means that the insurance company can charge you lower premiums accordingly.

So why would anybody go for permanent life insurance? Well, there are aspects of permanent life insurance that resemble investments, and for some people with complex financial situations, that can make this type of policy more attractive. There can also be tax advantages involved for some people in choosing permanent life over a term life policy. Again though, assuming your financial situation is pretty simple, you’d do well to just buy yourself a good term life policy and handle your investments on your own or with a financial planner focusing on this task alone.

Above all, be aware that many insurance agents will try to sway you into buying permanent life insurance despite the higher premiums, touting their peripheral benefits over term life. If you don’t need those additional features in your policy, they certainly are not worth paying multiples of what you will pay for your term policy. A good idea is to consult an online guide to life insurance basics and talk to a financially knowledgeable friend or relative for advice that is specific to you. Life insurance doesn’t have to be that complicated, at least not for people who simply want basic coverage to protect their loved ones in the event of their untimely demise. Term life is pretty simple, and quite inexpensive as well.