Permanent Life Insurance
When you've decided that it's time to purchase life insurance, there are as many choices for plans as there are different people who need them. The task can be overwhelming and you may be tempted to purchase the easiest and simplest type of life insurance available. For most people, this usually means term life insurance. Term life has some great benefits, especially if you want low cost term life, but before you call that number on your screen, check out getting life insurance online, both quotes and coverage. You may be surprised at what you find. While term life definitely is the easiest to get, permanent life may be a better bet in the long run.
Permanent policy life insurance differs from term life insurance. Term life has the feature of being simple and available for a specific term of time, whereas permanent life insurance policies cover you for a much longer period of time-your entire lifetime (or a preset age), plus the ability to borrow against the policy for needs such as college tuition for your children-the most common reason for the purchase of this type of life insurance- and can accumulate a cash value. Term life has no cash value and the amount you purchased in your policy is the amount that your beneficiary will get. (There is no accrued cash value.)
With a permanent life insurance policy (sometimes called "life assurance") you will need to wait for the specified time to go by in order to cash out the accumulated value of the policy, but it can be a great safety net for the middle income couple whose child is approaching college age, or if a medical emergency should arise. These are just two of the reasons that permanent life may be a better choice for you then term life.
Another good reason to choose permanent life insurance is that the cash value is tax deferred-you do not have to pay taxes on the earnings through the policy as long as it remains active. Even the withdrawals are not taxed, a big plus for working class people who need a break.
You can choose from two basic types of permanent insurance; whole life, which pays dividends, and universal, which is a flexible policy. You can research both in side by side comparisons online. If you are recently married and need life insurance for long term, this is a good option for you, especially if you foresee the need for additional income in the future-meaning kids. The premiums for these policies will not increase as you become older. Also, if you cancel the policy, the cash value is yours to keep, after penalties for early withdrawal or cancellation are applied.
Yes, permanent life insurance costs more up front than does term life insurance, and any loans or withdrawals will reduce the death benefits to your beneficiary, but the long term benefits are better. Just make sure that you have set aside what you need to cover basic burial expenses and some medical bills before you apply for a loan against your life insurance and you will be okay. Permanent life is a good long term solution to your insurance needs.
