Permanent Life Insurance

What is Permanent Life Insurance

Permanent life insurance is a type of insurance policy that serves almost a similar purpose with general life insurance. However, unlike general life insurance, which is limited to specific causes of death and covers a particular period of years, permanent life insurance is a plan that has no limitation or expiry duration.

Alongside death benefits, permanent life insurance also combines a saving portion plan, allowing policies to build cash value, against which they can borrow cash in some instances or withdraw to cater for financial needs.

Who Should Enroll for Permanent Life Insurance

A permanent life insurance policy is a fit coverage for any person regardless of age. However, the earlier you sign up for it, the cheaper it becomes.

How Permanent Life Insurance Works
Permanent life insurance works by providing a unique insurance policy that covers death benefits and cash value savings. This policy also offers divided to the insured. Although the dividends are not always guaranteed, many insurance agencies offer the option to apply accumulated or current profits toward the payment of all or parts of the premiums. You can also decide to take the dividend as cash or use it to purchase more coverage.

Different Type of Coverages in Existence
There are several coverages for permanent life insurance. The primary differences between these coverages are how the premiums are paid and how the cash value grows over time. The following are common coverages available:

  • Whole life coverage
  • Universal life coverage
  • Variable life coverage
  • Indexed comprehensive life coverage
  • Variable universal life coverage

Major Benefits of Permanent Life Insurance Policy

  • Permanent life insurance lasts for the entire lifetime as long as you keep paying your premium charges as agreed in the terms.
  • Your premiums cannot be increased. Most permanent life insurance features a level premium, which means your insurance provider cannot raise the premiums as you grow old or in the event of sickness.
    Some of the contributions are saved into a tax-deferred account with interest. This is one feature that makes this policy unique.
  • There is a possibility of recapturing some money spent on premiums. It is possible to recover some money spent on premiums through interest and dividend gained.