Advantages of Permanent Life Insurance
When you’re looking for insurance that ensures lifetime financial security for your loved ones, permanent life insurance is the solution for you! You may also come across instances where it is referred to as whole life insurance.
Simply put as permanent life insurance is insurance policies that do not expire. They cover you for your whole life, as long as you continue paying your premiums on time. While they might be more expensive when compared to other premiums, permanent life insurance is virtually guaranteed to pay out eventually.
Pick the Permanent Life Insurance That Best Suits Your Needs
Guess what? When you pick permanent life insurance, there are types of policies you can pick from to meet your particular needs. There are two major types of permanent life insurance – participating life insurance and universal insurance. Though the two insurances are similar in offering lifetime coverage and the opportunity for tax-free cash growth, they differ in the way they are structured.
Participating Life Insurance
- Guaranteed money grows inside your policy
- Conservative asset management
- Policy owner dividends
Universal Life Insurance
- Manage your risk profile and choose investment options
- Payment flexibility
Here’s Why Permanent Life Insurance Might be the Best Option for You
- Steady Premiums: In whole life insurance, the premium levels remain at a steady level for the entire duration of the policy. Though they start at a higher rate than term life insurance, the prices will go down, as opposed to term premiums that increase every time you renew your policy. In fact, some policies even let you pay premiums for a particular duration of time or up to a certain age, with no premiums required after that.
- Fixed Investment Proportion: Whole life insurance has an investment component apart from your insurance component. In what is popularly called a participating policy, as the name suggests, you can participate in the profits of your insurance company through investment. The insurer decides how the investments are made, but it is generally a steady rate of return with low volatility. The income earned through these investments is tax-free when left to a beneficiary.
- Cash Value: Permanent life insurance policies have a feature called the “cash surrender value” that grows the longer you’ve had a particular policy. You can use this amount to borrow against your policy or cancel it to redeem the CSV (“surrendering”). However, once this amount is withdrawn, it is taxable. So, surrendering your policy to collect this amount might lead to various consequences, like, having to repay the borrowed amount into your policy within a given period or have a considerable portion taken away from the policy that you’ve worked so hard to earn. Most policies offer this option after 5-10 years of paying into the policy. Some insurers might also charge high surrender fees that decrease over time.
Permanent life insurance is yours for life! It can ensure a brighter future for your kids as well as build your retirement income. See to it that you read your policy thoroughly and understand it. Reach to your nearest agency to learn more about permanent life insurance policies, their benefits, and how they can be tailored to fit your requirements.
Contact Harpreet Puri for expert guidance in selecting a permanent life insurance plan to meet your long-term financial planning needs.