Qualities Of Permanent Life Insurance

Posted on: 16 December 2021

Life insurance has several advantages that are not common in other financial instruments. This policy helps you deal with the adverse financial consequences of death. As a primary earner, you can secure the financial future of your dependents through life insurance. You can select a term or permanent life policy. A term life insurance policy is the basic and most affordable one. You can purchase the term life insurance for a specific period and renew later. The permanent life insurance policy involves payment of premiums until your death. Once you pass, your beneficiaries receive the benefits. This article discusses a few permanent life insurance features that set it apart from other options.

Cash Value

All life insurance policies have an amount that the beneficiary receives after your death. However, you can still take out a policy loan and use the life insurance policy. This option is an added advantage for permanent life insurance, whereby you receive funding that helps you pursue various agendas when you are still alive. Therefore, a permanent life insurance policy has liquidity characteristics that make it desirable for some people. 

Policy loans are advantageous for several reasons. If you die before paying back the whole loan amount, the insurer subtracts the remainder from the amount given to beneficiaries. The loan arrangement is such that you take out a loan against your assets. Therefore, the policy loan has no approval process. Policy loans also have lower interest rates than other loan options. In addition, you can use the funds from the loan in a manner of your choosing. 

Lifelong Cover

Did you know that insurers no longer demand premiums for people past a certain age? Permanent life insurance matures once you die, provided you pay your premiums. If you live beyond a hundred years (depending on the insurer), you can cease paying the premiums, and your beneficiaries still receive the benefits after your death. Some permanent life insurance policies pay out at a stipulated date of maturity. If you live to 100, your insurer distributes your benefits in some cases or awaits your death. This arrangement depends on the contract details. 

Unchanging Premiums

You may select a subcategory of permanent life insurance called whole life insurance, where the premiums do not change. The consistency of a whole life insurance policy makes it a popular option for people who want permanent life insurance. Another advantage is that the sum assured remains the same regardless of the premiums paid. 

Expensive

Permanent life insurance policies are more expensive than term insurance. This attribute means you must weigh your options and make the right financial decisions. Ensure you can sustain premium payments throughout your life. In addition, ensure that the sum assured is enough to provide for your dependents in your absence. Despite this high quote, the permanent life insurance policy guarantees you tax-deferred growth and life-long benefits. This policy also helps you pursue investments in paying your medical bills. Therefore, carefully weigh your options and determine if permanent life insurance is appropriate for you. 

Permanent life insurance provides a policy loan, life-long coverage, unchanging premiums, and is generally more expensive than other policies. 

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Protect Your Loved Ones

Nobody likes to contemplate their own death. But the harsh reality is that something could happen to you at any time. If the worst were to happen, what would your family do? They would certainly be better off if you had life insurance. If you were to pass away, a life insurance policy would pay for your funeral expenses, and it would leave your decedents a certain amount of money to live off of. Life insurance is usually a smart buy, but picking the right policy is not always that easy. Read more about life insurance here on this blog, and you'll have an easier time making this choice.

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