The importance of securing permanent life insurance coverage.
Shopping for life insurance isn’t on anyone’s list of fun things to do. It can be stressful and daunting to secure coverage that will protect your loved ones when you’re no longer around to do so. One of the first things you probably want to understand, though, is how permanent life insurance works. You may have heard this is a good coverage to purchase to ensure your family’s financial needs are met when you’re gone.
What is permanent life insurance?
Permanent life insurance does what it says on the tin – it is permanent, life-long coverage. By contrast, a term life insurance policy only lasts for a designated term length, such as 10, 20 or 30 years. While this can be a more affordable coverage, permanent life insurance does not have to be renewed. Additionally, permanent coverage has a cash value component that grows tax-free, which your family can then borrow against.
Types of permanent life insurance
- Whole life insurance: Premiums are fixed and the cash value component grows at a guaranteed rate.
- Universal life insurance: A universal life policy premium is flexible between a set maximum and a minimum amount. Once your cash value component is large enough, you can pay your premiums with it. The cash value component’s growth is based on interest rates determined by the market, making it a slightly riskier policy.
- Variable universal life insurance: The premiums are flexible between a set minimum and maximum. The variable part of the policy means you can choose how to invest the cash value from the policy provider’s set of options.
Make sure you have the right life policy that steps in when your family needs it the most. Talk to a trusted life insurance advisor to determine your policy and coverage exactly. Contact Donald Weiss Insurance Services to get started on your coverage today.