Permanent Life Insurance
Permanent insurance provides lifelong protection and is known by a variety of names. These policies are designed and priced for you to keep your life insurance policy over a long period of time. If you don’t intend to keep the policy for the long term, it could be the wrong type of insurance for you. However, if you wish to have peace of mind knowing that your family is covered in the case of an emergency, you may wish to consider permanent life insurance.
Types of Permanent Life Insurance
There are many different types of permanent life insurance. The three major types of permanent life insurance that we offer are whole or ordinary life insurance, universal life insurance, and variable life insurance. Different people may benefit from the different offerings for each type of insurance, so it is important to thoroughly review the differences in each plan type when selecting a policy.
Whole or Ordinary Life
Whole or ordinary life insurance policies are guaranteed to be paid by insurance companies for a person’s whole life as long as the insurance premiums are paid as scheduled. Whole life policies build up cash values that may be paid back to policyholders in the form of dividends. These dividends can be used to lower insurance premiums, to purchase term life insurance, or to purchase additional insurance. Dividends may vary depending on how well the investments and other business criteria of the insurance company are doing.
This variation of permanent insurance allows you, after your initial payment, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the amount of the death benefit more easily than under a traditional whole life policy. To increase your death benefit, you usually will be required to furnish the insurance company with satisfactory evidence of your continued good health. Also, decreasing does not lower premiums.
This type of permanent policy provides death benefits and cash values that vary with the performance of an underlying portfolio of investments held in a separate account. You can choose to allocate your premiums among a variety of investments which offer varying degrees of risk and reward. You will receive a prospectus in conjunction with the sale of a variable product. The cash value of a variable life insurance policy is not guaranteed, but some policies may guarantee that death benefits cannot fall below a specified minimum level.
Choosing Permanent Insurance
Permanent insurance is a good option for those that wish to ensure their family’s protection for a long duration. Permanent life insurance is often more expensive than term life insurance initially, so this is generally not worth it for those that do not intend to keep the insurance for the long term. Due to the characteristics of permanent life insurance, it is important to consider whether you will be able to continue to keep up with the premium payments for a long period of time before opting for this type of plan.
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