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Understanding short-term vs. long-term life insurance

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Taking care of your family is your primary goal, so you've decided to learn more about life insurance to help protect their financial future. But it doesn't take long to get lost in the lingo: short-term vs. long-term life insurance, permanent, universal, variable and more.

"Short-term" generally refers to term insurance, which provides affordable coverage for a specific period, like 10 to 30 years. There's also temporary life insurance, which covers a year or less. Meanwhile, "long-term" usually means permanent life insurance, which can cover you for the rest of your life.

Understanding the different types of life insurance

All life insurance essentially works the same way: You purchase it by making payments (a "premium") to a company, and if you pass away while you're covered, the company will pay out the defined amount to the people you've named as beneficiaries.

One of the primary factors in choosing life insurance is deciding how long you want the coverage to last. Here's what you need to know about your short-term vs. long-term life insurance options.

Temporary life insurance covers you for a year or less

Temporary life insurance is a form of short-term coverage. It usually provides you with life insurance for less than a year. It works just like other life insurance policies—if you pass away during the coverage period, your beneficiaries will receive a death benefit.

Key things to know about temporary life insurance:

  • Provides extremely short-term coverage
  • Tends to have very low-cost, fixed premiums
  • May be able to renew yearly, but premiums may rise
  • Offers no cash value option

Temporary life insurance is not very common, and not all insurance providers offer it. Some people choose this policy to bridge the gap between jobs that have a life insurance employment benefit, or if they know they need coverage only for a limited time.

Term life insurance covers you for a set period

Another form of coverage is term insurance. It covers you for a specified time, with options like 10-, 15-, 20- and 30-year terms. You can determine which contract length and value best meets your needs. As long as your premiums are paid, your loved ones will receive your death benefit if you pass within the contract period.

Key things to know about term life insurance:

  • Provides coverage for both short and long lengths of time
  • Has fixed premiums with varying costs
  • May be renewable at the end of the term, but premiums may rise
  • Offers no cash value option

Term insurance is generally less expensive than permanent coverage because it doesn't accrue a cash value—money you can access during your lifetime—and it can expire without paying out a benefit. Many people get a term policy in early to mid-adulthood to provide for their family or cover the cost of a mortgage if they were to pass away.

Permanent life insurance covers you for life

Permanent life insurance is an umbrella term for a variety of long-term coverage, including whole life, universal life and variable universal life. It's designed to protect you and your loved ones throughout your lifetime, as long as coverage remains in force. In addition to a death benefit, permanent life insurance often has a cash value component, which means you can withdraw money from your accumulated funds.

Key things to know about permanent life insurance:

  • Can provide lifetime coverage
  • May have fixed or flexible premiums
  • Doesn't need to be renewed, so premiums won't increase
  • May offer a cash value option with interest or investment-earnings growth

Permanent coverage can be more expensive than term, but it may fit your needs if you don't want to worry about your age, health or risk factors affecting your premium prices over the long term. You also have access to your cash value for any use while you're alive—whether to supplement your retirement needs or to cover a major purchase—making it a versatile financial planning tool.

Factors to consider when exploring life insurance

Selecting life insurance coverage is a personalized decision, and it may even change over time as your lifestyle and needs shift. When determining how much coverage you should have, you may want to consider:

  • Your family and loved ones—who do you provide for and what are their needs?
  • Your income—what would it take to replace what you earn?
  • Your financial obligations—do you have debts your survivors would struggle to pay?
  • Your age and health—how would these affect your premium rates?
  • Your risk factors—do you have a lifestyle or hobbies that endanger your safety?
  • Your legacy—do you want insurance to be a means of passing generational wealth?
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Life insurance calculator

Life insurance protects your loved ones. It helps make sure they have income if you die unexpectedly and covers your final expenses. But how much life insurance do you actually need? Use this calculator to find out.

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Choosing the best option for you and your family

Many factors go into choosing life insurance coverage, but supporting your loved ones and leaving a positive legacy stands out. Whether you're looking for temporary, term or permanent coverage, you have choices.

To help sort out your options, connect with a local Thrivent financial advisor. They can review your needs, values and goals to determine what short- or long-term coverage makes the most sense for you and your family, both now and in the future.

Guarantees based on the financial strength and claims paying ability of Thrivent.

If requested, a licensed insurance agent/producer may contact you and financial solutions, including insurance may be solicited.

A contract has exclusions, limitations and terms under which the benefits may be reduced, or the contract may be discontinued. For costs and complete details of coverage, contact your licensed insurance agent/producer.

Loans and surrenders will decrease the death proceeds and the value available to pay insurance costs which may cause the contract to terminate without value. Surrenders may generate an income tax liability and charges may apply. A significant taxable event can occur if a contract terminates with outstanding debt. Contact your tax advisor for further details. Loaned values may accumulate at a lower rate than unloaned values.

Whole Life and Universal Life: Increases and decreases have limitations related to contract size and your age. Increases may require evidence of insurability. Decrease charges may apply to a decrease in coverage.

Investing involves risk, including the possible loss of principal. The prospectus and summary prospectuses of the variable universal life contract and underlying investment options contain information on investment objectives, risks, charges and expenses, which investors should read carefully and consider before investing. Available at