Permanent life insurance 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 offers lifelong protection. There are several types of permanent life insurance, including whole life insurance, universal life insurance, and variable life insurance.
Whole life insurance is the most basic type of permanent life insurance. It offers a death benefit as well as a cash value component that grows over time. 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 provides flexibility in premium payments and death benefit amounts. With universal life insurance, policyholders can adjust their premium payments and death benefit as their needs change. The cash value component of universal life insurance also has the potential to earn interest.
Variable life insurance is a type of permanent life insurance that allows policyholders to invest a portion of their premiums in various investment options, such as stocks and bonds. The cash value of a variable life insurance policy fluctuates based on the performance of the underlying investments.
Permanent life insurance can be a valuable financial tool for individuals who want lifelong coverage and the potential to build cash value over time. It is important to carefully consider your financial goals and needs before purchasing a permanent life insurance policy. It may be beneficial to consult with a financial advisor or insurance specialist to determine the best type of life insurance for your specific situation.