Here’s why you should consider permanent life insurance policies.

If you are looking to secure life insurance, then you might think that your only option is a term life policy.  While term life insurance is certainly the most common form of life insurance, there are many other types of policies.  For instance, you might want to consider investing in a permanent life insurance policy.  But what is permanent life insurance, and how can it benefit you?  Here’s what you need to know.

What is Permanent Life Insurance?

As the name suggests, permanent life insurance is any life insurance policy that offers coverage throughout your life.  In contrast, term life policies will only offer coverage for a set amount of time, typically 10-30 years.  So, when you select permanent life insurance, you may not need to worry about your coverage expiring, depending upon the type of policy you select.

Advantages of Permanent Life Insurance

All life insurance policies pay out a death benefit when the policyholder passes, and permanent life insurance is no different.  A death benefit is the amount of money that will be paid out to your beneficiaries, usually your immediate family members.  You family can use this money to cover your outstanding debts, your ongoing financial obligations, your missing income, your final expenses, and their day to day expenses.

In addition to death benefits, permanent life insurance policies also offer a cash value component.  Policyholders are allowed to borrow against their cash value component should they need quick money.  Borrowing against your life insurance policy is convenient as you do not need to wait to be approved for the loan.  Additionally, the interest rates on these types of loans are far lower than the rates on traditional bank loans, making them cheaper and easier to pay back.  Please keep in mind that your cash value component grows as you pay your life insurance premiums.  So, you may have to wait a set period of time before you will be able to access the cash value component of your policy.

Types of Permanent Life Insurance

There are different permanent life insurance policies types to consider.  Here are some of the most popular options:

  • Whole Life Insurance– Premiums are fixed, and the cash value component grows at a guaranteed rate. However, this also means that whole life policies tend to be more expensive.
  • Universal Life Insurance– Premiums are flexible and can fluctuate between a set maximum and minimum amount. The cash value component’s growth is dependent on interest rates determined by the market, but there is a guaranteed minimum annual return.  These policies are cheaper because they are subject to market fluctuations, making them riskier for the policyholder.

This is why you should consider securing permanent life insurance coverage.  Do you have more questions about your life insurance?  If so, then contact the experts at Randy Jones Insurance Services in Pleasanton, California.  We are ready to assist you with all your coverage needs today.