Permanent life insurance, also known as whole life insurance, either "straight" life insurance or "conditional life" insurance, is life insurance coverage that is guaranteed to stay in force for the full lives of the insured, regardless of the insurer's payments, requirements, and/or maturity dates. Unlike many other types of life coverage, there is no accumulation of premiums, and there is no lapse in payments during the insured's life. Instead, the payments and premium payments are made continuously throughout the life of the policy. The cost of this type of coverage depends on a variety of factors. Some of these factors included age and health at the time of application, whether the applicant has any pre-existing conditions, and whether the applicant makes monthly payments or not. In general, the cost of this type of insurance is highest among middle-aged males with good health.
The term "permanent" refers to a policy's ability to last the lifetimes of its insured. Permanent life insurance can be a little more expensive than term life insurance due to the fact that it is often used as an investment instrument. This type of policy is also not dependent on any particular health status, so it is applicable to anyone who may become sick and unable to work. Also, permanent life insurance offers higher coverage in comparison with universal life, term, and whole life insurance policies.
Another factor that determines the cost of a permanent life insurance is the amount of coverage required for each beneficiary. Most term life policies only offer coverage for one beneficiary, called the death benefit. A death benefit is defined as the cash surrender value at the time of death, less any loan repayments, if any. If at all possible, a person should purchase a permanent life insurance that will cover all of their dependents. Death benefits are paid either on a tax-deferred basis or upon the actual death of the policyholder.
Universal life insurance allows certain age-related factors to be included in the premium cost. Age-related factors are specified as the maximum age at which the policy can begin. There is usually a minimum age at which the insurance can begin, which is typically the age of sixty-five. There is also a certain number of years during which the policy can provide coverage, and these years are usually between the age of sixty-five and the policyholder's actual death date.
Permanent insurance policies are made by providing an asset to the insurer in return for premiums paid. The insurer receives a lump sum, usually in the form of a line of credit, which is held by the policyholder until the cash is available. Once the cash is available, the lump sum is used to pay off the premiums and the policy is closed. Because premiums and accumulated interest on a permanent life policy are at risk, it is important that you use the funds wisely.
With permanent life insurance, the death benefit is paid only upon the policyholder's death. The cash value account is designed to have the least risk possible, but in the end, you are the only one that pays premiums. In some cases, if you do not pay premiums, the insurance company will pay the death benefit, but they will then require you to take out an additional insurance policy called a "conversion loan" that converts the permanent insurance into a type of universal insurance coverage. This process is referred to as "conversion" because the death benefit does not become due or cease due to nonpayment of premiums.
The term "permanent" refers to a policy's ability to last the lifetimes of its insured. Permanent life insurance can be a little more expensive than term life insurance due to the fact that it is often used as an investment instrument. This type of policy is also not dependent on any particular health status, so it is applicable to anyone who may become sick and unable to work. Also, permanent life insurance offers higher coverage in comparison with universal life, term, and whole life insurance policies.
Another factor that determines the cost of a permanent life insurance is the amount of coverage required for each beneficiary. Most term life policies only offer coverage for one beneficiary, called the death benefit. A death benefit is defined as the cash surrender value at the time of death, less any loan repayments, if any. If at all possible, a person should purchase a permanent life insurance that will cover all of their dependents. Death benefits are paid either on a tax-deferred basis or upon the actual death of the policyholder.
Universal life insurance allows certain age-related factors to be included in the premium cost. Age-related factors are specified as the maximum age at which the policy can begin. There is usually a minimum age at which the insurance can begin, which is typically the age of sixty-five. There is also a certain number of years during which the policy can provide coverage, and these years are usually between the age of sixty-five and the policyholder's actual death date.
Permanent insurance policies are made by providing an asset to the insurer in return for premiums paid. The insurer receives a lump sum, usually in the form of a line of credit, which is held by the policyholder until the cash is available. Once the cash is available, the lump sum is used to pay off the premiums and the policy is closed. Because premiums and accumulated interest on a permanent life policy are at risk, it is important that you use the funds wisely.
With permanent life insurance, the death benefit is paid only upon the policyholder's death. The cash value account is designed to have the least risk possible, but in the end, you are the only one that pays premiums. In some cases, if you do not pay premiums, the insurance company will pay the death benefit, but they will then require you to take out an additional insurance policy called a "conversion loan" that converts the permanent insurance into a type of universal insurance coverage. This process is referred to as "conversion" because the death benefit does not become due or cease due to nonpayment of premiums.
