There Are Many And Diverse Policy Choices
When I suggest they should look at permanent life insurance options some of my clients will say something like…”do you mean whole life insurance, I don’t want it.
I like term life insurance. It is the cheapest is it not?” People sometimes come to decisions because they have insufficient or incorrect information.
When they say they don’t want it I usually suggest they look at it in more detail and if they do some are immediate converts.
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Permanent Life Insurance Options
Permanent life insurance, as the name implies, is simply that…permanent. It can never be taken away from you and it never expires. Although you have to put out more in premiums some people find that it is worth the extra premiums.
There are quite a few permanent life insurance options which are worth some of your attention. Let us look at some of them.
- Whole Life Insurance
Whole life insurance is sometimes referred to as straight life insurance. This is one of the better known permanent life insurance options. You pay a set premium every month and it never changes.
Upon death the face amount of the policy is paid to your beneficiary. That also remains level for the life of the policy. Sounds like any term policy doesn’t it? Not really…
Whole life insurance costs more than term insurance and has cash values. It also accumulates dividends. Although dividends are a return of premium they also accumulate interest.
If your policy is with one of the finer companies this dividend can be substantial and can be taken in cash, be left to accumulate interest or be used to reduce premiums.
If this policy is with a highly rated company, this policy can in the long run be less expensive than term if the dividends are used to reduce premiums. In some cases after a few years, if the interest rate holds, premiums can actually be eliminated.
Even though no life insurance company can guarantee dividends this is one of the permanent policy options that some have found quite viable.
- Variable Life Insurance
Another permanent insurance option is variable life insurance. This is one of the more attractive permanent insurance options. Simply put, variable life insurance is the marriage of whole life insurance to an investment portfolio.
The investment are usually in stocks, bonds, money market and mutual funds.
It is required by law that any quotation for this type of policy be accompanied by a prospectus and that the salesman has an N.A.S.D license.
- Universal Life Insurance
Universal life insurance is another of the few life insurance options that some find attractive. This is like a marriage between term life insurance and a saving plan. You decide how much of your money to apply to investment and how much to premiums for life insurance.
You get all the benefits of a whole life policy for a lower initial premium. If your investments don’t perform this type of insurance can turn out to be much more expensive than it initially appears.
- Single Premium Life Insurance
In my opinion this is one of the more attractive permanent life insurance options simply because you pay one premium and never pay another for the rest of your life and at the same time never lose your life insurance.
You also enjoy all the benefits of a whole life policy. You have to put up a large amount of money up front but for those who like this type of insurance and can afford it, it is worth it.
Limited Payment Life Insurance
let us say you want to buy permanent life insurance but you don’t want to be paying premiums for the rest of your life. The limited payment life policy may meet your approval.
This is one of the more popular permanent life insurance options. Let us say you want a 10 pay life policy. You pay just fer 10 years and you have your policy for the rest of your life. One of the more interesting permanent life insurance options isn’t it.
There are also several variations to the whole life policy which life insurance companies create to be competitive. All whole life is not the same. The descriptions are too numerous to detail here.
This is, briefly, what permanent life insurance options are all about.
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