Permanent Life Insurance
For educational and informational purposes only, This is not a recommendation to buy, sell or invest. Please consult your advisor and tax consultant.
Permanent life insurance is a type of life insurance plan that does not expire. The 3 main types are:
Whole Life Insurance
Universal Life Insurance
Indexed Universal Life Insurance
Whole Life Insurance has both death benefits and cash value. There is potential cash value for any dividends declared by a company annually and the premiums for whole life insurance are guaranteed to never alter.
This is ideal for those whose priority is death benefit protection over cash value accumulation.
Universal Life Insurance is designed to have flexible death benefits and premiums. The cash values connected with this type of insurance are credited at an interest rate that is standardized by the insurance company. Unlike whole life insurance, these interest rates are subject to change, but will never be less than a minimum interest rate of 0.3%.
This type of plan is ideal for someone who needs life insurance but is wary of any alterations to the minimum interest rate. It is especially useful to individuals who want the guarantee of a fixed interest rate but the prospect of additional credits. With a universal life insurance plan, any increase in the death benefits may be subject to underwriting approval.
Indexed Universal Life Insurance, much like a universal life insurance plan, has flexible death benefits and premiums. The cash value will grow based on a specific interest crediting plan that is directly correlated with changes in the Market Index. Indexed universal life insurance has downside protect via minimum guarantees so that your cash value will not decline.
This is ideal for those who are focused on cash value accumulation but need the death benefit protection.
Additional Types of Permanent Life Insurance
Variable Universal Life Insurance, similar to indexed universal life insurance and universal life insurance, has flexible death benefits and premiums. Your cash value with this particular insurance will thrive based on the performance of the managed stock. Additionally, designing a portfolio will help determine your comfort level and any risk involved. Any guarantees are dependent upon the insurer and do not protect the value of the portfolio.
This insurance type is ideal for the individual that needs life insurance but wants to control their cash value is invested.
Term Insurance has a fixed premium with guaranteed death benefits for a fixed period. There is no cash value involving this type of insurance and coverage will only be in place for a certain term length. The guarantees are completely dependent upon the claims of the facilitating company.
This is ideal for those attempting to budget their policy and who are particular about protection clauses. This insurance is also suggested for temporary use and is not meant to be a permanent policy to set in place.