Permanent Life Insurance - Choosing the Best Policy
Permanent Life Insurance - Choosing the Best Policy in How to Choose Life Insurance?
Permanent life insurance was designed for individuals who felt that investing their funds into a term life insurance policy wasn't quite right for them. If you pay on term life insurance for a given period of time, and you do not die, that money simply disappears.
It's like car insurance – you pay to insure your car, but you don't get any money back unless you actually get into an accident.
Permanent life insurance offers an investment vehicle that goes along with life insurance payments. It is “permanent” in that it continues for the duration of your lifetime, and a payout is guaranteed. You can also borrow against some permanent life insurance policies, so long as you've paid your premiums on time, and don't borrow so much that you lose your plan.
However, it this type of insurance isn't for everyone, as is made clear in the recent article at doughroller.net.
If you don't need as much money as you once did, if you can't afford to spend much money on premiums, or if you only have a short period of time in which you need coverage, then term life insurance is better for you.
For example, if your retirement is only 5 years away, and you'll be cashing in on a large amount of money at that time, then term life insurance is perfect for you.
Term life insurance is also better for many younger people, since it costs significantly less for them. Older people will pay more for their insurance, and might not enjoy such a large savings between term and permanent life insurance.
However, if you plan to keep your life insurance for a very long time, and you like the fact that the funds are tax-deferred if you cash in on them during your lifetime, then a permanent plan might be right for you.
Permanent life insurance can also provide a larger sum of cash for your beneficiaries upon your death, which can come in very handy if you have a large amount of debts that will outlive you, or if taxes will be owed against your estate upon your death.
There are several types of permanent life to consider when you purchase, including traditional whole life insurance, universal life, and variable life. Each offers buyers different degrees of cash value, as well as risk.
Speak to a knowledgeable insurance broker about the different types of life insurance and how they might apply to you. There are a lot of options to choose from, but ultimately, choosing the best policy for you and your loved ones can provide them with solid financial support in the event of your passing.