Permanent Life Insurance
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Permanent life insurance is a type of life insurance that can help your family financially after you die. Permanent life insurance doesn’t expire. The policy remains in place for your entire life as long as the premium is paid. The most commonly chosen types of permanent life insurance are universal and whole life insurance.
What Does Permanent Life Insurance Cover?
Permanent life insurance covers a policyholder from the time they purchase their policy until they die. After the policyholder passes away, a tax-free death benefit will be paid to their beneficiaries.
Types of Permanent Life Insurance
There are several types of permanent life insurance policies. Some include an interest-earning cash value. This is a savings that grows over time that you may be able to access while still alive. The cash value can be used for medical expenses, additional retirement income, college, and more.
- Indexed universal life insurance: this type of policy comes with interest-earning cash value, however, the rate is not fixed. The rate is based on how an independent financial index performs.
- Survivorship or second-to-die Insurance: this policy covers two people and doesn’t pay the death benefit until both have passed away.
- Universal life insurance: in this type of policy, policyholders may adjust premium payments and the death benefit. This type of policy may build cash value and earn a minimum interest rate.
- Variable universal life insurance: like universal life insurance, this type of policy allows policyholders to adjust their premiums and death benefit. It is associated with investment funds that determine how the cash value builds or declines.
- Whole life insurance: this type of policy has a fixed premium rate and death benefit. Whole life insurance has a cash value that builds tax-deferred.
It’s important to note, if you withdraw funds from the cash value there may be tax consequences and it could affect the death benefit.
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What Are the Benefits of Permanent Life Insurance?
- Permanent life insurance policies provide coverage for life as long as premiums are paid.
- Most policies offer a cash value that grows over time.
- The premium typically remains level.
- The money accumulated is tax-deferred.
What are the Disadvantages of Permanent Life Insurance?
- Permanent life insurance policies typically have higher premiums.
- If the policy is canceled early on, part of the cash value may be forfeited.
Contact our Local Agents
There are several types of permanent life insurance policies. Universal and whole life are the most common. Some people choose to have both a term life insurance plan and permanent life insurance plan or convert from term life to permanent life.
Choosing doesn’t have to be hard. If you’re interested in a permanent life insurance policy or would like to convert from a term life policy to a whole life policy, Signature Insurance Group can help. Our agents will help you decide which policy suits you and your family’s needs best. So contact us today for a free quote.Back to Life Insurance
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