Permanent life insurance is a contract in which the premiums are divided between death protection and savings. A portion of the premium pays for the mortality or death benefit component, and a portion goes toward paying the insurance fees. The remainder of the premium is put into an account that earns tax-deferred interest, dividends, or investment gains. Permanent insurance is often called endowment or cash-value insurance. This type of insurance is intended to provide the policy holder benefits over a lifetime. However, the policy will not be permanent if the policy does not have enough cash value, if the insured is not able to keep paying the premiums, or if the investment's value decline substantially.

Although permanent insurance is permanent under most circumstances, it is still possible to lose money with certain types of permanent insurance products. The length of the time period in which payments must be made is sometimes a factor in permanent life insurance policies. You should determine if you can or want to pay premiums for the required length of time before you enter into a contract. If you do not wish to pay premiums throughout your entire life, fewer payment periods with fewer benefits can be arranged, or you may have an option of paying higher premiums over fewer payment periods.