Permanent life insurance refers to life insurance policies that do not expire. Two common insurance types that fall under this umbrella are whole and universal life insurance. If you want life insurance that offers you coverage for the rest of your life, permanent life insurance may be the right option.
Because it offers longer coverage, permanent life insurance often carries a higher monthly premium. However, it also comes with benefits that can benefit you and your family during your life.
4 Benefits of Permanent Life Insurance
1. Cash Accrual Can Be Used in Life
Permanent life insurance policies accrue cash, which can be withdrawn and used for any purpose. Usually, there are no tax consequences or other penalties.
2. Long-Term Care Coverage
Many whole and universal life insurance policies may allow the policyholder to use some insurance funds to pay for long-term or chronic care. These provisions are referred to as accelerated care benefits, living needs benefits, or a benefit access rider.
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3. Level Premium and Death Benefits
Once you have permanent life insurance and the benefits and premiums have been defined, they do not change. When your whole or universal life insurance policy is fully paid, no additional payments will be required. You can pay a lump sum at any time, or make regular premium payments. Then, keep your coverage without paying any more.
4. Reinvest Dividends
Permanent life insurance dividends can be reinvested instead of taken as cash. This allows you to leave a greater amount to your beneficiaries without paying any extra money into the policy.
It can be difficult to figure out which life insurance plan is right for you. Working with an insurance broker can help you cut through the noise and find a plan that meets your needs. Schedule a one-on-one meeting with one of our insurance brokers to get your questions answered!
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Source: AARP, “5 Things You Didn’t Know About Life Insurance“