Looking to build a tax-free inheritence and protect your family? Find out if permanent life insurance is right for you.
Permanent life insurance is any life insurance policy that lasts your entire life—unlike term life insurance, which covers you for a set period of time. There are several types of permanent life insurance including:
Different permanent life insurance policies offer varying features but most have one thing in common: they build cash over the life of the policy out of the monthly premiums you pay. Permanent life insurance can therefore be considered a kind of savings account you build over time, but one that promises to pay out a lump sum to your family if you should die prematurely.
Since permanent life insurance is guaranteed to pay out eventually, it is much more expensive and more complicated than term life insurance, which is meant to protect your dependents only for the time period when they’re relying on your income. Most permanent life insurance policies like whole life are six to 10 times more expensive than term life. Our agents can help you decide between permanent and term life insurance. You can get started by comparing life insurance quotes.
Want to keep learning? Read our full analysis on the pros and cons of term life vs whole life policies.
A basic form of permanent life insurance that promises to keep monthly premiums level for your whole life. The amount committed by the insurance company to cover the death benefit declines gradually as the cash value contributed through your premiums grows. Cash value grows at a fixed, guaranteed interest rate.
Similar to whole life insurance except it allows more investment options for the cash value: investment funds with variable rates of return will reflect broader market trends.
Similar to whole life insurance except 1) premium costs are subject to change—the rate is variable, and set by the insurer 2) allows the cash value to be used to pay the premiums 3) cash value grows at a variable interest rate set by the insurer
Permanent life insurance for seniors, final expense insurance covers burial costs and any end-of-life expenses such as outstanding debts. Policies are usually offered at smaller coverage amounts—$10,000 or $25,000.