Did you know that by making monthly permanent life insurance payments, your insurance provider will guarantee payment of a death benefit to beneficiaries?
If you’re looking for the best way to invest your money, you’ve likely considered different forms of insurance.
Permanent life insurance is a popular option for many, as it gives you a unique blend of coverage and investment power. But what is permanent life insurance? How does it help you plan for your future?
To help clear up confusion, we have put together a guide. Keep reading to find out more.
What Is Permanent Life Insurance?
Permanent life insurance is a type of life insurance policy that provides coverage for your entire life, rather than a set term.
As long as you pay your premiums, your policy will remain in force. Your beneficiaries will receive a non-taxable death benefit payout when you pass away. This means the exact amount of benefits in the policy will be issued to your beneficiaries, and not subject to taxes and debts you have at your passing.
Like other types of life insurance, permanent life insurance is designed to provide financial protection for your loved ones in the event of your untimely death.
When you purchase a permanent life insurance policy, your insurance provider will typically require you to undergo a medical exam. You will also need to answer a series of questions about your health and lifestyle.
Insurance providers use this information to determine your insurance rates, which are based on factors like your age, gender, health, and smoking status.
One of the key differences between permanent life insurance and other types of life insurance is that permanent life insurance policies typically have higher insurance rates.
This is because permanent life insurance provides lifetime coverage. It also includes an investment component that will accumulate cash value over time.
This cash value component can help you build up savings that you can use for things like retirement, education expenses, or emergencies.
Building Cash Value
When you pay your premiums, a portion of your payments goes towards building cash value in your insurance policy. Over time, this cash value grows tax-deferred.
The cash value in your permanent life insurance policy is invested by the insurance company. Your insurance company will credit the earnings on these investments to your policy.
As a result, the cash value grows over time. This means that you will have an additional income source. You can use the cash value to pay premiums, take out a loan, or even surrender the policy for cash.
One of the key advantages of using the cash value in your permanent life insurance policy is that it’s available to you on a tax-free basis.
This means that you can access the cash value without incurring taxes, which can be a valuable way to supplement your retirement income or cover unexpected expenses.
To make the best use of the cash value in your permanent life insurance policy, it’s important to work with an insurance agent who can help you understand your options and make informed decisions.
Your insurance agent can help you evaluate the various ways that you can use the cash value in your policy. They will also provide guidance on the tax implications of each option.
Your Rates Won’t Increase
Permanent life insurance policies come with a fixed premium. This means that your insurance rates will never increase over time.
This is in contrast to other types of life insurance policies, such as term life insurance. These types of policies might have lower initial insurance rates, but these rates might increase significantly as you age and need to purchase new term policies. Since the permanent life policy is written for your entire life, the rate class you receive at the purchase of the policy will stay in effect in perpetuity.
With a permanent life insurance policy, you can enjoy the peace of mind that comes from knowing your insurance rates will remain the same, regardless of any changes to your health.
Customize Your Policy
With a whole life insurance policy, you will have the flexibility to tailor your insurance policy to your specific needs and goals.
For example, you can choose the amount of coverage you need, the length of the premium payment period, and the level of your death benefit. You can also add riders to your policy to provide additional benefits.
This could include coverage for long-term care expenses or a waiver of premiums in the event of a disability.
With a customized permanent life insurance policy, you can have the peace of mind that comes from knowing that your insurance coverage is tailored to your unique situation.
Pass Security on to Your Loved Ones
A permanent life insurance policy can provide your beneficiaries with a death benefit that they can use to cover expenses such as funeral costs, outstanding debts, and ongoing living expenses.
This can help ease the financial burden on your loved ones in the event of your untimely passing.
Permanent life insurance can also provide other forms of financial security for your loved ones.
For example, the cash value component of your policy could be used to supplement your retirement income or cover unexpected expenses.
Whether you are a young family just starting out or an empty nester looking to protect your legacy, whole life insurance can provide a valuable source of financial security for those you care about most.
Understand the Benefits of Permanent Life Insurance
There are many great reasons why you should get permanent life insurance.
Not only will your insurance policy help you to build cash value. You’ll also have peace of mind in knowing that your rates won’t increase. Permanent life insurance is a great option for those who want to pass security on to their loved ones.
Are you ready to purchase a permanent life insurance policy? If so, we are here to help you. Don’t hesitate to get a quote today!
