Permanent Life Insurance
When considering life insurance for your family’s needs, you have several options. It is important that you carefully evaluate your lifestyle and needs. Those evaluations enable you to choose the type of insurance that best suits you and your family. One such option you may find perfect for your situation is permanent life insurance.
Permanent Life Insurance Definition
Permanent life insurance is just what you might imagine. It is life insurance that is permanent throughout the course of the insured’s life regardless of situations that might arise. This type of insurance is appealing because typically, as we age, our health status declines. Once you are approved with a Permanent life insurance policy and you pay your life insurance premiums timely, your death benefit remains locked in and payable to your beneficiaries when you die.
Another benefit of permanent life insurance is that it accumulates a cash value over the course of the contract. The policy owner is able to borrow against this cash value for a variety of needs:
Down payments on large purchases, such as buying a home
Funding education needs
Because of these built in provisions, this form of life insurance costs more than other types of insurance, such as term life insurance, but the benefits these policies offer make it worth looking into permanent life.
Who Benefits Most From Permanent Life Insurance?
Permanent life insurance is not for everyone. For instance, if you are older the rates for a permanent life insurance policy might be high if you are approved. However, this type of long-term life insurance is good for the following situations:
You plan on keeping the policy for more than 20 years
You plan on borrowing money from your policy later in life
You are wealthy and need a method to pay your estate taxes after you pass on
Types of Permanent Life Insurance
Within the scope of permanent life insurance, several types of life insurance exist:
Whole Life Insurance
This life insurance is the basic form of permanent life insurance. Often called traditional life insurance, this type of policy is designed to “mature” through the life of the policy. This means that at some point (Typically at 100 years of age), the policy benefit is paid out even if the insured is still alive. If longevity runs in your family, this might be appealing, since you would be able to decide how their benefits are distributed. This form of insurance guarantees premium payments remain the same through the course of the contract and also offers a cash value to the policy owner that they can draw on.
Universal Life Insurance
Is a very flexible form of life insurance. With universal life insurance policies, the policyholder can pay as much as they want, whenever they want towards the policy premium. Your premiums are added to your cash value immediately. The fees are charged directly to the cash value of the policy. A no-lapse guaranteed universal life policy (NLG) is also offered, which is a safer and often times a cheaper policy. This type of policy is like a hybrid of universal life and whole life. Even if your cash value bottoms out, your policy will remain in effect. A no-lapse guaranteed universal life policy is the least expensive way to own a permanent life insurance policy.
Variable Life Insurance
This type of life insurance offers the policyholder a say in where the money paid toward the policy is invested. At any time during the life of the policy, the holder may transfer cash value or divide the cash value up between any investment options available. To protect itself and the policy, each insurance company’s variable insurance policy stipulates where the cash funds can be transferred. This form of insurance offers you more control and transparency on how your money is used.
How to Find the Permanent Life Insurance Policy Best for you
When it comes to insurance, be it car, home or life insurance, you should do your homework and research. The key to any good research is first to look at your situation and goals in life. Once you have decided the type of lifestyle you have and will continue to have over the course of your lifetime, you should then start to examine the different types of insurance available. If you feel that permanent life insurance is the way to proceed, the next logical step would be to contact several life insurance companies for a permanent life insurance quote. This can be done either by phone or on the Internet. If you choose the Internet, you will also have the added benefit of the additional research that it affords you.
Using a permanent life insurance calculator online is a great way to see where you stand, what you can afford and what will serve the purposes that you need the policy for. Many insurance websites as well as several financial companies offer life insurance calculators on their websites. After asking you a few basic questions, the calculators will help you to evaluate your needs.
Do not forget the value of researching the companies that you might be considering. Seeking out permanent life insurance reviews can alleviate many worries for a family thinking of investing in a policy. A solid company who has a first-rate standing in the financial world is the best bet to make sure that the funds will be there when you need them. The last thing you want to do is to invest in a policy through a company that might not be there years from now.