Life Insurance

Types of permanent life insurance

Permanent life insurance is where the life insurance coverage offered is for the whole life of the insured, unlike term life insurance in which it is applicable only for a term. The policy will pay out in the event of death of the policy holder to the mentioned beneficiaries in the policy, and in addition to this it will accrue cash value.

There are many types of permanent life insurance policy and you should look into each of these before you sign up for any particular one.

Whole life Insurance is a form of permanent life insurance wherein the policy holder will pay a premium which remains the same through the insured period and in addition to this the policy has a cash accrual. A slight change from this basic form of Permanent Life Insurance is Universal Life Insurance which was introduced with added features. In this policy type, the policy holder decides the premium amount or is given the choice on how much premium he or she wants to pay. They also get to decide when they would like to pay their premiums. They can draw cash accumulated in the policy.

However, more flexibility was offered to policy holders with the Variable Life Insurance type. In this form of Permanent Insurance all the benefits of the universal life insurance came into effect but the money taken from the policy holder was put into investment opportunities based on the choice of he policy holder. So, the insurance company would offer a list of investment opportunities wherein their money would be invested, but the policy holder decides which ones these would be.

An enhanced from of Variable Life Insurance is Universal Variable Life Insurance, wherein the policy holder gets to choose the premium amount, and the investment options. Their chances of earning money through these investments are higher particularly when they choose really good investment types.

All the permanent life insurance policy types have tax benefits. Of all the types, Whole Life Insurance is considered to be the most basic form of permanent life insurance and universal variable life insurance is most opted one because of the many benefits it offers to the policy holder.

Print | Bookmark