What are the advantages of permanent life insurance?
Permanent life insurance provides a death benefit as long as you live if your premiums are paid. As with all life insurance, the benefits are paid to beneficiaries tax-free. Periodic review of life insurance policy is recommended.
Some polices have the option to pay premiums for a shorter periods such as 20 years, or until age 65. Premiums are higher, since the premium payments are made during a shorter period.
Cash value life insurance policies may be one of several types: whole life, universal life and variable life.
- Whole Life insurance premiums generally do not change, however they will be higher than those paid for term life insurance.
- Universal Life Insurance provides for flexible premium payments and changes to death benefit. The premiums, less expense charges, go into the policy account and earn interest. Review of policy account is recommended to ensure there is enough in your policy to keep policy in force.
- Variable Life Insurance premiums are not necessarily guaranteed, but the applicant may be able to pay extra premium to do so. Death benefits and cash values depend on the investment performance of one or more separate accounts. Be sure to review the prospectus carefully.
For more information see http://www.naic.org/documents/consumer_guide_life.pdf