What It Is…
Permanent life insurance is a life insurance policy that does not have an expiration date. Unlike term life insurance, you never need to renew a permanent life insurance policy. In addition to that, this type of life insurance policy allows you to build cash value that can be used as a source to borrow from if you ever need to do so. It also provides your beneficiaries with a death benefit.
Who It Is for…
Since term life insurance must be renewed after the term is over, you will have to go through the underwriting process again to continue the coverage. When this happens, your insurance company may decide that you don’t qualify for the lower rate than you were paying and that your rates will have to increase. This may occur every time you renew your policy, and they may decide not to renew it at all. If you believe that you would be charged higher rates when you renew your policy, you may want to consider purchasing a permanent life insurance policy that will never expire. Permanent life insurance is also for you if your beneficiaries will have to pay federal taxes on the property that you would like to leave them after you pass away.
How It Works…
When you purchase permanent life insurance, you will have a waiting period. During this time, your cash value accumulates, but you will not be required to pay taxes on this money while your policy is active.
Different Types of Coverage in Existence…
One option is whole life insurance, and it covers you for your entire life. The cash value for this policy is allowed to grow at a guaranteed rate. There is also universal life insurance that also provides you with cash value and gives your beneficiaries a death benefit, but you earn money based on the performance of the market.
Major Benefits…
If you have a significant amount of property that you would like to leave to your beneficiaries, they may be forced to sell the property to have money to pay federal taxes. Permanent life insurance would give your beneficiaries the means to pay those taxes so that they can enjoy the property that you worked all of your life to leave them.