What Are The Different Types Of Permanent Life Insurance?
Permanent life insurance is a type of life insurance that provides coverage for the life of the insured, as long as premiums are paid. It also includes a savings component that can accumulate cash value over time. There are several different types of permanent life insurance policies, each with its own unique features and benefits:
| Type of Policy | Description |
|---|---|
| Whole Life Insurance | This is the most common type of permanent insurance policy. It offers a death benefit along with a savings account. The savings element grows based on dividends the company pays to you. Whole life insurance offers less flexibility than other types of permanent life insurance. |
| Universal Life Insurance | This policy offers more flexibility than whole life insurance. You may be able to increase the death benefit if you pass a medical examination. The savings account generally earns a money market rate of interest. After money has accumulated in your account, you will also have the option of altering your premium payments, providing there is enough money in your account to cover the costs. |
| Variable Life Insurance | This policy combines death protection with a savings account that you can invest in stocks, bonds, and money market mutual funds. The value of your policy may grow more quickly, but you also have more risk. If your investments do not perform well, your cash value and death benefit may decrease. |
| Variable Universal Life Insurance | If you purchase this type of policy, you get the features of variable and universal life policies. You have the investment risks and rewards characteristic of variable life insurance, coupled with the ability to adjust your premiums and death benefit that is characteristic of universal life insurance. |
It’s important to carefully consider your options and choose the type of permanent life insurance that best fits your needs and goals. Consult with a licensed insurance professional who can help you make an informed decision based on your individual circumstances.
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