You may be interested in permanent life insurance, but quite confused about all of your options. If so, then you’re not alone. There are quite a bit of options when it comes to permanent life insurance.
Some individuals take out permanent life insurance policies because of the death benefits associated with them, while others take them out to build cash value. Whatever your reasons for taking out a permanent life insurance policy or your financial goals, here are your options:
- Whole Life Insurance - Whole life insurance is the most popular type of permanent life insurance, as the contracts pays dividend from the issuing company, while cash value grows at the same time. The dividends paid out by the issuing company are produced when the company invests the premium dollars.
- Universal Life Insurance – Universal life insurance is a bit different from whole life insurance, as it features a term insurance component. However, a universal life insurance policy also has a cash component, thereby allowing an individual to use the policy as an investment. The cash earned in a universal life insurance product is similar to that of a bond investment.
- Variable Universal Life Insurance – A variable universal life insurance product is similar to a universal life insurance product; however, the owner of the account can choose from several sub account and asset allocation. A variable universal life insurance policy is subject to the risks of the market, though, which therefore either increases or decreases the cash available on the policy at any given time. Many individuals choose variable universal life insurance policies as a supplement to retirement income.
Individuals usually decide which type of permanent life insurance is best for them based on cost. Term insurance, for example, is usually chosen first because it is inexpensive. However, individuals may also consider permanent life insurance because of the accumulation of cash over time. A permanent life insurance policy will remain in effect for your lifetime, provided you meet your financial obligations, whereas a term policy is for a specific length of time.
