Permanent Insurance Key Points

Unlike Term Life insurance, Permanent Life insurance, as the name implies, remains in effect as long as you make your agreed upon monthly premiums. In addition, all Permanent Life insurance policies have a cash value and investment component. A portion of the monthly premium is deposited into some type of tax-deferred annuity.

The most common types of Permanent Life insurance are Whole Life, Universal Life and Variable Life. The differences between the three are related to the interest rates and how investment funds are allocated.

Key Points

  • Permanent Life remains in effect for your entire life, as long as you make the agreed upon payments.
  • Permanent Life insurance accrues cash value, and may eventually pay for itself.
  • With Permanent Life, you can borrow against cash value.
  • Universal Life and Variable Life offer greater flexibility and potentially higher rates of return on investment, but are also more risky as investments than Whole Life Insurance.
  • You should purchase enough Term Life insurance to cover 10x your annual salary for at least 7 years, 10 Years if you have children. Use our benefits calculator tool to determine the death benefit that is right for you and your family.

Whole, Universal, or Variable?

Good question. That really depends on your budget and how much risk you are willing to take as an investor. If you feel you are on the conservative side, Whole Life is a good choice. It does have a cash value, and premiums cannot fluctuate during the time the policy is in effect. However, you also may not change the death benefit amount nor have any say in how your money is invested.

Universal and Variable Life insurance both offer a greater degree of flexilbility. With both types of insurance, you can adjust your premium and your death benefit. With Variable Life, you are also empowered with investment options. However, with both types of insurance, premiums and interest rates, and even your death benefits, are subject to the whims of the markets.


Affordable Life Insurance Rates
Are Waiting For You!
Choose Your State

Related Information

Types of Life Insurance

There are two main types of life insurance: permanent life insurance and term life insurance.

Read More

Discovering How Whole Life Insurance Does Work

Whole life insurance is a type of permanent life insurance policy that accumulates cash value over time.

Read More

Define Whether Whole Life Insurance Is Right for You

Shopping for a life insurance policy? It’s important to understand what defines whole life insurance, as compared to term plans. Read on to learn more.

Read More

6 Types of Life Insurance Policies

To understand which life insurance policies might be right for you, let's look a little closer at term and permanent life insurance.

Read More

What is an Insurance Premium? Definition and Use

Insurance premiums are the monthly or annual payments you make to an insurance company for life insurance coverage.

Read More

Universal Life Insurance 101

Universal life insurance is a form of permanent life insurance. Find out how it works and how it differs from whole life insurance.

Read More

Which is Better: Term Life Insurance or Permanent Life Insurance?

What’s the difference between term and permanent life insurance, and which is right for you? Read on to find out.

Read More

Variable Life Insurance

Variable life insurance is a form of permanent life insurance. It can offer you coverage for the rest of your life and includes a cash value savings component.

Read More

Affordable, Low-Cost Life Insurance

Term life insurance is generally more affordable than permanent life insurance. Here's what you need to know about term life insurance policies and how they work.

Read More