Think of term insurance as TEMPORARY and permanent insurance, as it name states, as PERMANENT.
Term insurance comes in multiple forms – T10 (10 years), T20 (20 years), T30 (30 years). Policies typically will have some extension options included, such as automatic renewal (your policy will provide the pricing for automatic renewal), switch (change from a T10 to T20/30 before a deadline), Conversion (convert some or all of your coverage to permanent insurance). But a key element is that the insurance has an end date. The insurance companies will not provide renewals beyond a certain age (between 75-85).
As for permanent insurance, it provides you with insurance coverage for your entire life.
Why one vs the other?
Term insurance can be used to cover short term needs: mortgage, other debt, higher need for funds when children live at home. Permanent insurance can serve to create an estate for your family, as a form of tax deferral, to provide funds to pay final income and estate taxes or to cover needs for a lifetime. Each can serve a purpose at different points of time in one’s life. Temporary insurance provides an extremely cost effective way to insure temporary needs.
