Although term policies are perfect for most people, permanent life insurance provides lifelong coverage.
There are two primary options regarding life insurance: term life insurance and permanent life insurance. Which one is ideal for most people? It depends. Although term policies are perfect for most people, permanent life insurance provides lifelong coverage. This blog is designed to help you understand more information regarding permanent insurance.
How Does Permanent Life Insurance Work?
Unlike term life insurance, permanent plans are designed to remain until the policyholder dies. If you pass away with the policy intact, your beneficiary will obtain the death benefit tax-free. But if you cancel or surrender the policy, the insurance company will pay you the balance of the policy’s cash value. You might have to pay taxes and a surrender charge.
Permanent insurance plans tend to be more expensive than term life insurance premiums. Your premium could be fixed or varied, depending on the type of permanent policy you choose. Some permanent life insurance companies provide no-exam final expense coverage – the insurer won’t decline your coverage, even if you have been turned down for other life insurance before.
Types of Permanent Life Insurance
There are types of permanent policies with different levels of investment opportunities and payment flexibility, including:
Whole Life
A whole life policy is the most basic permanent insurance type offering fixed-growth cash value components and fixed premiums. Most policies provide multiple ways to pay the premiums. You can select payments for a certain number of years, for your whole life, or until a certain age. The death benefit is fixed, too. Your beneficiaries will obtain your policy’s face value, not the cash value plus face value.
Universal Life
The feature appeal of universal life policies is the ability to adjust your insurance premiums and death benefits. This adds more flexibility if your financial situation changes. Some policy types allow you to integrate the death benefit with the cash value, increasing the payout to your beneficiary/ies. However, that will most likely increase your premium.
Variable Life
A variable life insurance policy allows you to place your cash value into an investment account, known as sub-accounts. The insurer manages these accounts. If the cash grows, it may be available for a loan, withdrawn as cash, or boost the death benefit for your beneficiaries. Keep in mind that if your investments don’t go as planned, the opposite can occur—though most insurers offer a guaranteed minimum benefit to ensure your beneficiaries receive some money.
Get in Your Voluntary, Supplemental, and Health Insurance Policies with the MWE Partnership!
Are you a business looking to provide your employees with essential voluntary benefits? If so, look no further than The MWE Partnership. When you choose The MWE Partnership, you get experienced service and comprehensive voluntary benefit options that will meet all your employees’ needs. With over 17 years of experience, The MWE Partnership is your go-to provider for all your supplemental benefit needs. If you are interested in finding out how The MWE Partnership can help your business, contact us today! We encourage you to like our Facebook page and follow us on Twitter and LinkedIn for the latest voluntary benefit news!