Permanent life insurance is for people who don’t want to worry about their policy expiring. That’s because permanent life insurance lasts for the duration of the policyholder’s life. As long as the premiums are paid, the policy remains active. This type of policy also combines a death benefit with a savings plan. The savings portion gains monetary value that the policyholder can borrow from. Whole and universal life permanent insurance policies are options.
A benefit of a whole life policy is that its premium remains unchanged for the duration of the policy. And similar to universal life coverage, whole life accumulates cash for the policyholder to borrow.
Consider a whole life insurance policy if the following is important to you:
1. Premiums remain unchanged for the life of the policy
2. Cash value accumulation that’s available to you during life
3. Coverage that remains active as long as premiums are paid
Universal Life is slightly different from whole life. Universal policies offer flexible premiums. You have the option of adjusting how much you pay each year. If your policy has accumulated cash, then you can put it towards the premium. You don’t have to but it’s an option.
The potential growth of a universal life policy changes over time. The insurer sets a minimum interest rate. But it’s possible that the insurer’s portfolio will earn more than the minimum interest rate. If that happens, the insurer can credit the additional interest to your policy.
Universal life insurance is good if you want:
• The ability to adjust premiums and the amount of coverage
• The ability to borrow from the policy and use the cash during your lifetime
• Permanent life insurance that doesn’t expire when you reach a certain age
As your personal situations change (i.e., marriage, the birth of a child or job promotion), so will your life insurance needs. Care should be taken to ensure this product is suitable for your long-term life insurance needs. You should weigh any associated costs before making a purchase. Life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health, and age, and has additional charges for riders that customize a policy to fit your individual needs.