PERMANENT LIFE INSURANCE

What Is Permanent Insurance:

Permanent Insurance provides lifelong protection as long as you continue to pay premiums. The premiums are based on your age at the time of purchase and generally remain level, not increasing as you age. Because premiums remain level, permanent insurance is often more expensive than term insurance, but permanent insurance accumulates cash value, which may be refundable upon surrender of the policy. While the policy is in force, cash values can be borrowed against or used to pay premiums.

There are four basic types of permanent Insurance:

1.Whole Life: (sometimes also called life or ordinary life) has a fixed guaranteed instant rate and develops guaranteed cash values.

2.Universal Life: has more flexibility. Within certain limits, you can change the death benefit, the amount of premium and payment frequency. Unlike Whole Life, this is an “interest driven” policy, which normally pays a minimum guaranteed interest of 4% to 4.5%. If the interest rates are continuously low, additional premiums may have to be paid to avoid a lapse of coverage.

3.Variable Life: has death benefits and cash values that vary with the performance of an underlying portfolio of investments that you select. The death benefit and cash value are not guaranteed. They can go down as well as up, although there may be a guaranteed minimum death benefit.

4.Variable Universal: combines the premium and death benefit flexibility of universal life with the investment flexibility and risk of variable life.