Protect your military family today. Call: phone icon1-800-522-5221

Life Insurance

What Is Permanent Life Insurance for Military Members?


While you're in your prime-earning years, your children are younger, and expenses are more significant, having term life insurance is critical because it provides a lot of coverage at a low price. That is particularly important to ensure your family is cared for should you pass away unexpectedly. But it’s equally important to have permanent life insurance that you carry throughout your whole life, too.

By design, term life insurance only lasts for a set amount of time, typically between 10 and 30 years, depending on the policy. Many term policies expire when you reach a certain age. To maintain your protection for a lifetime, the policy has to be renewed or converted to permanent coverage life insurance. So what does permanent coverage offer?

What Is Permanent Life Insurance?

Permanent life insurance is a type of insurance that lasts your entire life, as long as the premiums are paid according to the terms of the policy. The difference between term vs. permanent life insurance, is that term only covers you for a specific period. One special thing about permanent life insurance is that it has a cash value, which means the money you pay into it (after expenses have been taken out) can grow over time. You can even borrow against it if you need to.

RelatedChoose the Life Insurance That's Right For You

With permanent life policies, your premium will never increase. And, by purchasing permanent life insurance coverage as early as possible, you will lock in a lower rate that carries through the rest of your life. Many permanent life policies also build cash value over time.

With a permanent life insurance policy, cash value grows on a tax-deferred basis at a stated crediting rate.. That cash value can often be borrowed against or surrendered if necessary to apply to expenses later in life, such as college tuition, home improvement projects, and retirement.

Cost of Permanent Life Insurance

The cost of permanent life insurance can vary widely based on a number of factors, including:

  • Your Age: The younger you are when you buy the policy, the less you'll typically pay in premiums.
  • Health Status: If you're in good health, you'll usually pay less. If you have health issues, you may pay more.
  • Gender: On average, women live longer than men, so they often pay lower premiums.
  • Lifestyle Choices: If you smoke or participate in risky activities, you'll likely pay more.
  • Policy Type: There are different types of permanent life insurance, such as whole life, universal life, and variable life. Each has different costs.
  • Coverage Amount: The more coverage you want, the more you'll pay.

Types of Permanent Life Insurance Coverage

While all permanent policies provide life coverage, not all are created equal. Here are some of the most common types of permanent life insurance.

Whole Life Insurance

Whole Life Insurance is the most popular permanent life insurance option. It provides permanent coverage with premiums that never increase. Many whole life policies also offer a guaranteed growth rate, so there are no surprises when building cash value over time.

Universal Life Insurance

Universal Life Insurance is another popular form of permanent life insurance, but unlike whole life insurance, you’ll never pay over a specified amount. Universal life can provide higher returns on cash value depending on the market, making this riskier than a whole-life policy. There’s a guaranteed minimum annual return.

Variable Life Insurance

Variable Life Insurance provides more flexibility than whole or universal life. Depending on the policy, your premiums may stay static or vary. With variable life insurance, you determine how to invest your cash value from a set of options similar to mutual funds.

Indexed Universal Life Insurance

Indexed Universal Life Insurance also offers flexibility — policies typically come with a minimum and maximum premium payment, and you can choose to pay any amount in between. You can also use those earnings to pay your premiums as you build cash value. For these policies, the cash value grows based on the performance of indexes like the S&P 500, and you are guaranteed a minimum annual return.

Variable Universal Life Insurance

Variable Universal Life Insurance works similarly to indexed universal life. You choose how much you want to pay between the minimum and maximum premium, and you can use the cash value to pay dividends if you so desire. The difference is that variable universal life lets you choose how to invest your cash value, selecting from a set of options similar to mutual funds.

Guaranteed Universal Life Insurance

Guaranteed Universal Life Insurance is a combination of term and whole life insurance. Unlike term insurance, guaranteed universal life remains in force until your death. However, it does not offer a guaranteed cash value growth rate. Guaranteed universal life is more expensive than term life but less expensive than whole life. Many of these policies also allow lowering your death benefit as your needs change.

Final Expense Coverage

Final Expense Coverage is designed to help cover burial and other end-of-life expenses. These policies are considered permanent because it stays with you from the time you buy it throughout the remainder of your life. These usually don’t require a medical exam. However, they cost more because the insurance company takes a much higher risk. These policies also have a lower benefit, typically around $25,000 or less.

AAFMAA Can Answer Your Questions About Permanent Life Insurance

With various permanent life insurance policies designed specifically with servicemembers and Veterans in mind, AAFMAA can help you determine which approach is best for you and your family. AAFMAA’s permanent policies include a 100% money-back guarantee, a Long-Term Care Settlement Option, and our hallmark Survivor Assistance Services.

Get a free quote and find out how much whole life coverage would cost you. Learn more about the benefits of an AAFMAA Membership today!

This article was originally published September 30, 2021.