What is one strategy you used to determine the right type of life insurance (term vs. permanent) for your needs? What factors did you consider?

Question

Choosing between term and permanent life insurance can be a complex decision with significant financial implications. This article presents key factors to consider when making this important choice, drawing on insights from industry experts. From aligning insurance with your financial goals to adapting coverage for different life stages and business needs, these expert-backed strategies will help you make an informed decision about your life insurance options.

Alex Sierra · Answer

One strategy I used to determine the right type of life insurance for my needs was to align each policy with a specific financial goal or life stage. Right out of college, I knew I was in excellent health and wanted to lock in favorable rates while I was young. That's when I picked up two permanent policies—one whole life and one variable universal life (VUL). At the time, I saw them as long-term tools: one for guaranteed coverage and cash value accumulation, and the other for more flexible, investment-oriented growth.
Later, when I became a parent, my priorities shifted. I needed to make sure my growing family would be financially protected if something happened to me. That's when I added a large term policy. It was affordable and gave me the high coverage I needed during the years when my financial responsibilities—like raising a child and building my business—were at their peak.
The key factors I considered were:
1. Affordability vs. coverage: Term gave me the most coverage for the lowest cost when I needed it most.2. Long-term planning: The permanent policies were about building future value and ensuring lifelong protection.3. Health and age: Locking in rates early gave me peace of mind and financial efficiency.4. Flexibility: The VUL gave me room to adjust as my investment strategy evolved.
Ultimately, I treated my insurance portfolio like a financial plan—layered, intentional, and adaptable to life's changes.

Rob Roughley · Answer

One key strategy I use—and regularly recommend to clients—when determining whether term or permanent life insurance is the right fit is to align the coverage type with the specific financial responsibilities I'm protecting.
Personally, I looked at my short- and long-term financial obligations and mapped them out across different life stages. For example, my wife and I have a mortgage, and while we don't have children yet, we're thinking long-term. So for now, term life insurance made the most sense to cover major debts and income replacement during our highest earning years. It's cost-effective, and it provides the financial safety net my family would need if something were to happen to me while we're still building our financial foundation.
That said, I also considered a layered approach—something I advise many clients to explore. While term covers temporary needs like a 25-year mortgage or income replacement, a smaller permanent policy can be used to lock in lifelong protection, support future estate planning, or leave a legacy. For business owners or those looking ahead to retirement planning, that permanent coverage can become a valuable asset.
The most important factors I considered—and that I walk clients through—are:
- Current and future financial obligations (mortgages, dependents, business ownership)- Budget (term is more affordable in the short term, while permanent builds long-term value)- Goals (is the coverage intended to protect a family, fund a buy-sell agreement, or leave a charitable gift?)- Health and insurability (locking in coverage while young and healthy can preserve future options)
Ultimately, choosing the right life insurance isn't a one-size-fits-all decision. It's about taking a practical, honest look at your life stage, responsibilities, and values. For me, and for many clients I work with, it's also about building flexibility—because needs evolve, and your policy should evolve with you.

Kyle Demyan · Answer

I began by examining what I wanted life insurance to actually accomplish for me, not just its cost. I believe too many people opt for term insurance simply because it's cheaper, without questioning whether it's the right tool for their goals.
In my case, I desired more than just a death benefit. I wanted access to cash while I'm alive, tax advantages, and long-term control and peace of mind. Consequently, I leaned towards permanent coverage because it provides living benefits as well, not just something my family receives when I die.
I also considered how long I wanted the protection to last. If I had known for certain that I only needed coverage for 20 years, then perhaps term insurance would have sufficed. However, my goals were more long-term and focused on financial growth, so it made sense to choose something that lasts and builds over time.
Therefore, the strategy was straightforward: look at the end goal and reverse-engineer from there. What type of coverage best supports that outcome? That's how I made my decision, and it's how I help my clients make theirs too.

Rami Sneineh · Answer

I always advocate for reverse-engineering the outcome. I ask clients how many years they want their insurance to do the heavy lifting. Term life insurance usually makes more sense when the objective is to pay off a 25-year home loan or to provide a college education for two children. It is predictable, clean, and can be locked in for as low as $30 a month on a $500,000 policy, depending on age and health.
Permanent insurance, however, is more feasible when a person is attempting to pass on wealth across generations or to finance a trust. In that case, I suggest paying less attention to the death benefit and more to the performance of the policy in later decades. Numerous purchasers are sold on cash value without paying attention to the time it takes to break even. A 15-year catch-up policy is not suitable for an individual who retires in 10 years. It is at the point of timeline and purpose that sense is normally made.

JP Monteverde III · Answer

After building Complete Care Medical from two employees to serving over 50,000 customers over 20 years, I learned that life insurance decisions should mirror your business growth phases. When I started the company in 2004, I chose term life insurance because I was personally guaranteeing business loans and had unpredictable cash flow from our small customer base.
The deciding factor was my "replacement income" calculation - I figured out exactly how much my family would need if I died during those critical early years when the business depended entirely on me. With fewer than 50 customers initially, I needed maximum coverage at minimum cost, so term made sense at roughly $150 per month for $750,000 in coverage.
Once we hit consistent growth serving thousands of customers with insurance-billed medical supplies, I shifted to permanent coverage. The cash value component now helps smooth out seasonal fluctuations in our healthcare business, especially during insurance plan changes in January when customer orders temporarily dip.
My strategy was treating life insurance like business planning - reassessing every 3-5 years based on your actual financial obligations, not hypothetical scenarios. When your income becomes predictable and you're building wealth rather than just protecting against loss, that's when permanent coverage starts making financial sense.

Michelle Robbins · Answer

I use the strategy of investing to invest and insuring to insure. Combining insurance and investments doesn't give you the best of both worlds. Instead, it provides mediocre investing and mediocre coverage for the money.
A term life insurance policy allows me to get the highest coverage for the lowest cost, making it a superior coverage type for my needs right now, with a family.
Instead of permanent life insurance with investment options, I opt for tax-advantaged retirement investment options that allow me to build wealth more effectively than a life insurance policy would.

Joseph Cavaleri · Answer

After 23 years in real estate and running multiple businesses, I use what I call the "business asset protection calculation" for life insurance decisions. When your income depends on active business operations like mine do with Direct Express Realty, Direct Express Rentals, and Direct Express Pavers, you need to protect that cash flow stream differently than passive investors.
My approach focuses on replacement income duration rather than net worth building. I calculated how long it would take my property management company to generate enough recurring revenue to support my family if something happened to me. Since rental income takes 3-5 years to build substantial monthly cash flow, I needed term coverage for that specific bridge period.
The key factor I considered was business liquidity versus personal liquidity. Real estate assets aren't instantly convertible to cash when families need it most. I chose 20-year term coverage because that's how long it typically takes to build a fully-paid real estate portfolio that generates replacement income without my active involvement.
I've seen too many real estate entrepreneurs get sold expensive permanent policies when they should be putting that extra premium money into acquiring more rental properties. A $300,000 duplex generating $2,400 monthly rent provides better long-term family protection than most permanent life insurance products.

Tornike Asatiani · Answer

When I launched Edumentors, I chose term life insurance—not because it was cheaper, but because it aligned with my actual risk window. I considered two factors: how long my family would depend on me financially, and what would happen to the business if I wasn't around. Term insurance gave me flexibility while I was scaling the company and raising funding. Permanent insurance felt like locking up capital I needed to grow. My advice? Match coverage to real needs, not just future fears.

Ethan Richardson · Answer

It depends on what you are actually trying to "insure." For example, if you are young (in your mid-30s or 40s) and your main goal is to protect your family's future if you die early, go for term life insurance. There's no debate there.
Term life insurance has no cash funds for you to take out if you outlive the term. But that's about it. You can insure yourself for, say, 20 or 30 years with a very low premium. Currently, there are term insurance policies available for a healthy 30-year-old that require monthly payments of $33 for coverage of $500,000. Such a big amount will surely be enough to support your family in case something tragic happens; that too without drying out your pockets.
Salespeople often go hard in selling you whole life insurance because they get a higher commission. The premiums for the same amount of coverage ($500,000) will require a monthly payment of $400 to $470 for the same person. They sell it saying, "It's also an investment." You can take out a portion of the cash fund. But it's way better to just invest in a no-load mutual fund if you have excess income. So, my vote definitely goes to term life insurance.

9 Factors To Choose Term vs Permanent Life Insurance

Table of Contents

9 Factors To Choose Term vs Permanent Life Insurance

Align Insurance with Financial Goals

Match Coverage to Life Stage Needs

Focus on Long-Term Financial Objectives

Consider Timeline and Purpose

Adapt Insurance to Business Growth Phases

Separate Insurance from Investments

Protect Business Cash Flow Streams

Choose Flexibility for Startup Risks

Term Insurance for Family Protection

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