A permanent life insurance policy is just that: You pay a premium every year until you die, and once you die, your family gets cash. There’s also a savings side to these policies—whole life and universal life insurance are ones you’ve probably heard of before. But…
The premiums are expensive because they go toward maintaining the policy and go toward building up your own cash fund from which you can borrow (or sometimes make withdrawals). Permanent life insurance can cost several thousand dollars each year, while the premium on a term life insurance is more likely to be in the low- to mid-hundreds each year. And since you pay that pricey premium up until the day you die, it can be hard to keep up with the tab. Most universal life policies, for instance, never pay out because payment lapses—and so the coverage lapses too.