INSURANCE
Permanent Life Insurance
Permanent life insurance is a type of life insurance policy that offers death benefits and cash values. Death benefits provide money to one’s beneficiaries upon one’s passing. Cash value is a type of savings able to be accessed even before death. This type of policy lasts from the opening of the policy to death.
Who is permanent life insurance for?
This type of insurance policy is for anyone who wants to protect his or her family after their death. It is available to anyone who is willing to pay the premium. This type of policy will last until death so long as the premium is always paid.
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How does this type of life coverage work?
The first feature of this type of policy is the cash value. This is a saving that accumulates as premiums are paid. Money can be borrowed from this account that is made from payments. Another feature is the death benefit. This is a designated amount of money that beneficiaries will receive upon the account owner’s death. If the policy was to be canceled, the owner will receive the accrued cash, though there may be a charge for canceling early.
What are the different types of coverage in existence?
Whole life insurance is the most common type of insurance. The values for the benefits stay fixed throughout the policy’s length. There will also be minimum interest earned on top of the value, and dividends are paid out.
Universal life insurance offers more flexibility with changing the death benefit or the cash value. Cash values can be used up through reducing premiums, however.
Variable universal life insurance is another type of coverage that offers investment options to increase the cash value benefit. There is a chance of investment losses reducing the benefits, however.
Indexed universal life insurance is the final type that has no fixed interest rate, causing greater gains and losses. They do have a minimum interest rate, however.
Life insurance policies such as the permanent type can offer financial security for one’s family in the future. This is true no matter the circumstances one’s family may face. Another benefit is that this type of life insurance lasts an entire lifetime rather than a set term.
