Most people are familiar with term life insurance, which we covered in a previous blog. However, there is another kind of life insurance often misunderstood – permanent life insurance. In this blog post, we will break down what permanent life insurance is, how it works, and the different types of permanent life insurance.
What Is Permanent Life Insurance?
As the name suggests, permanent life insurance is a form of life insurance that provides lifelong coverage as long as the premiums are paid.
Unlike term insurance policies that expire at the end of a specified period, permanent life insurance offers protection for the rest of your life.
There are many different types of permanent life insurance, but the most common ones are:
- Whole life
- Universal or adjustable life
- Variable life
- Variable-universal life
Whole Life Insurance
Whole life insurance is the most traditional and straightforward type of permanent life insurance policy. It provides a death benefit and a savings account known as cash value.
The policyholder can access the cash value of their policy during their lifetime, either by surrendering the policy or taking out a loan against it. Whole life insurance is a good choice for people who want lifelong coverage and a conservative investment option.
Universal or Adjustable Life
Universal Life Insurance is a type of permanent life insurance that also has a savings component while offering greater flexibility than whole life insurance.
With Universal Life Insurance, you can adjust the death benefit amount and premium payments within certain limits, allowing you to customize the policy to meet your changing needs over time.
Additionally, you may have the option to access the cash value through loans or withdrawals, providing a source of funds for various purposes such as emergencies, education expenses, or supplementing retirement income.
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Variable life
Variable life insurance combines the protection of permanent life insurance with a savings account you can use to invest in stocks and bonds.
If you are interested in this type of policy, it is important to know that it involves a certain level of financial risk. If your investments do not perform well, your cash value and death benefit may decrease.
However, some policies offer a guaranteed death benefit, so make sure to understand your policy’s terms before making a decision.
Variable-universal life
As the name suggests, this form of permanent life insurance combines the most important features of variable and universal life insurance.
Just like universal insurance, variable-universal life insurance allows you to adjust your premiums. At the same time, it provides the investment risks and rewards of variable life insurance.
Need Permanent Life Insurance? Carter Bradley Insurance Solutions Can Help
At Carter Bradley, our team is solely focused on your unique needs to find the best prices and coverage you require for your business, home, auto and life insurance.
Contact us today by email at info@carterbradleyinsurance.com, by phone at (951) 547-4240, or through our social media accounts on Facebook, Twitter, and LinkedIn.
