What does the term 'permanent life insurance' refer to?

The term 'permanent life insurance' refers to insurance policies that accumulate cash value and remain in effect for the insured's life. This type of insurance is designed to provide lifelong coverage, as opposed to term insurance, which only provides coverage for a specified period. Permanent life insurance typically builds cash value over time, allowing the policyholder to accumulate savings that can be borrowed against or withdrawn under certain conditions.

The emphasis on both the lifetime coverage and the accumulation of cash value is crucial for understanding this type of insurance. It differentiates permanent life insurance from term life insurance, which does not build cash value and only provides protection for a limited duration. This characteristic of accumulating cash value makes permanent life insurance a unique financial product that can serve not just as a death benefit but also as a financial asset during the policyholder's life.