A permanent life insurance policy is a type of life insurance that provides coverage for the entire lifetime of the insured, as long as the premiums are paid. Unlike term life insurance, which provides coverage for a specific period of time, permanent life insurance does not expire as long as the policy remains in force. There are several types of permanent life insurance policies, including whole life insurance, universal life insurance, and variable life insurance.
Whole life insurance is the most common type of permanent life insurance. It offers a guaranteed death benefit, as well as a cash value component that grows over time. The premiums for whole life insurance are typically higher than those for term life insurance, but they remain level throughout the life of the policy.
Universal life insurance is another type of permanent life insurance that offers more flexibility than whole life insurance. It allows policyholders to adjust their premiums and death benefits, within certain limits, to meet their changing needs. Universal life insurance also has a cash value component that can grow over time, based on the performance of the policy's underlying investments.
Variable life insurance is a type of permanent life insurance that allows policyholders to invest a portion of their premiums in a variety of investment options, such as stocks and bonds. The cash value of a variable life insurance policy can fluctuate based on the performance of these investments. While variable life insurance offers the potential for higher returns, it also carries more risk than other types of permanent life insurance.
It's important to note that permanent life insurance policies can be more expensive than term life insurance policies, but they offer lifelong coverage and the potential to build cash value. The choice between permanent and term life insurance depends on your individual needs and financial goals. It's recommended to consult with a licensed insurance professional to determine the best type of life insurance policy for your specific situation.