When getting life insurance, you have two options: term and permanent. Most people choose term life insurance because it offers protection for a specific period and it’s more affordable. However, permanent life insurance can be a good option for those who want to leave a legacy for their loved ones. In this guide, we’ll talk about permanent life insurance.
What Is Permanent Life Insurance?
Permanent life insurance is a policy that provides insurance coverage for the policyholder’s entire lifetime. It’s designed to provide a death benefit to the beneficiary upon the policyholder’s death and also has a cash value component, which allows policyholders to accumulate savings over time. Permanent life insurance policies can be either whole or universal life policies, both of which provide permanent coverage and cash value accumulation.
How Does It Work?
Permanent life insurance provides financial protection for your family and loved ones if you die. This policy generally pays a fixed premium annually, quarterly, or monthly. However, permanent life insurance typically has a death benefit and a cash value component.
The death benefit is the amount that will be paid out to your beneficiaries upon death, which can be used to pay off debts, cover final expenses, or provide income for your heirs.
The cash value component is an investment account that builds over time and can be used to supplement retirement income or pay for other expenses. These investments are tax-deferred and can be accessed through policy loans or withdrawals.
Who Should Choose Permanent Life Insurance?
Permanent life insurance is best suited for those who want to ensure their family has financial protection in the event of their death. It is also a perfect choice for those who want to build cash value or are looking for tax-advantaged savings options.
Does Permanent Life Insurance Expire?
Permanent life insurance does not expire. It is designed to provide coverage for your entire life as long as you keep paying your premium.