May
21
2007
What are the different types of permanent life insurance?
Author: Byron UdellA permanent life insurance policy is a policy that provides life insurance coverage throughout the insured’s lifetime – the policy never ends as long as the premiums are paid. In addition, a permanent life insurance policy provides a savings element that builds cash value.
Whole life insurance
Whole life insurance is a type of permanent life insurance, and is designed to remain in effect throughout one’s lifetime. It is well suited to needs that do not diminish over time, such as paying estate settlement costs and taxes. Generally, the life insurance rate (or premium) for this type of policy remains the same throughout the life of the insured. During the early years of the life insurance policy, premiums are much higher than those of a term life insurance policy. As a result, and by design, these life insurance policies develop cash values which can be accessed by the owner of the policy through surrenders or policy loans.
May 22nd, 2007 at 12:11 am
NIce thorough article. I think alot of consumers get caught up in the cash value parts of life insurance, perhaps because agents emphasize them and maybe too much. Very simply, term is not a great solution long term. If a person wants life insurance in their retirement years Whole Life is just about the best option, if they can buy it young enough