There are two basic types of life insurance coverage—permanent (sometimes referred to as cash value) and term. This article takes a closer look at the short- and long-term benefits of each.

A commonly used analogy to describe the two broad forms of life insurance is: renting vs. owning. Term life insurance is like renting a home. When you stop paying for coverage, your benefits end. On the other hand, with permanent life insurance, you build up cash value (i.e., equity or ownership). This cash value is available to you for a variety of purposes and may even be used to help pay premiums on your policy. Read more below.