What is permanent life insurance?

Permanent life insurance is designed to provide life insurance protection for as long as you, the insured, live assuming your premium payments have been made as required. Permanent life insurance is in contrast to term life insurance which provides protection for a set number of years, also known as a “term.”

Benefits of permanent life insurance:

Permanent life insurance offers two important benefits in particular. A permanent life insurance policy allows you to:

  • Build cash value in the policy that continues to grow tax deferred. This cash value can be a source of funding that you can use as part of your financial strategy and it can help you meet your financial goals. A key feature of permanent insurance’s cash value is that the owner can borrow against it for any reason (If you decide to borrow money from your permanent insurance policy, you are basically using the policy’s cash value as collateral. You will not have to go through the rigmarole of credit checks and other restrictions. However, you must re-pay the loan with interest, or your beneficiaries will receive a reduced death benefit).
  • Earn annual dividends that can be taken as cash, used to pay premiums or added to your policy to increase the policy’s death benefit and cash value. Dividends are not guaranteed. Ask a professional insurance agent at Insurance Direct 123 about the companies that we represent and their annual dividend histories.

Is permanent life insurance right for you?

You may want to consider permanent life insurance if you want to:

  • Construct a firm foundation for your long term financial plan/strategy (including retirement savings).
  • Keep active life insurance for your life’s duration.
  • Create and grow a funding source for emergencies and opportunities.
  • Provide for a child/loved one with special needs or a dependent child.
  • Help aging parents or other family members who require financial support.
  • Bolster a business that you want continued after you are gone.
  • Make equal inheritances among beneficiaries.
  • Create a legacy for your grandchildren (school tuition…), future generations, or a special charity.

Permanent life insurance options that can help you achieve your long-term goals:

  • Whole Life offers 3 guarantees: A specified death benefit, level/established premiums, and the ability to build cash value in the policy.
  • Universal Life affords permanent protection and the option to adjust your level of protection as well as your premiums and payment schedule to meet your changing needs.
  • Variable Life offers a balanced approach to protection with the option to build cash value through investment choices.

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