Life insurance that has no expiration date and that provides for the payment of
the face value upon death of the insured, regardless of when it may occur. This
contrasts with term insurance, which pays benefits only if death takes place
during the limited term (e.g., 1, 3, 5, or 10 years) of the policy. Under
permanent life insurance policies, the insured pays a level premium rate all of
his or her life. This approach results in an overpayment of premiums in the
early years of the policy and an underpayment in the latter years—which is
intended to average out over the life of the insured. Most types of permanent
life insurance (e.g., whole life, universal life, and variable life insurance)
accumulate a cash value that the insured may borrow or otherwise use.