Issue 01NotesLLQP
Term vs permanent: the comparison that actually decides it
Two products, one decision. The exam tests whether you can match the product to the need rather than recite definitions.
Term insurance covers you for a set period and pays out only if you die inside it. Permanent insurance covers you for life and builds a cash value alongside the death benefit.
Term is cheaper for the same face amount. Permanent costs more but never expires and accumulates value you can borrow against.
The shortcut: temporary need, temporary product. A mortgage that ends in 20 years is a term need. A permanent obligation — a dependent who will always need support, an estate tax bill — is a permanent need.
The trap: the question will describe a need, not name a product. Read for the duration of the need before you look at the answers.