I strongly believe it does for most people. While you pay more for permanent insurance initially, in later years you will be paying far less than if you buy term and keep renewing it every term period. Most people are living well into their 80's and 90's. If you can even find a policy that would renew to those ages, the premium would be extremely high. This is because term insurance premium go up with each renewal, permanent insurance premiums stay level. Permanent insurance also has what is called non-forfeiture options. This utilizes the cash value in the policy to help keep it in force should an illness or financial setback make premium payments unaffordable. You do not have those options with term insurance.
And their two main kinds of permanent life insurance . There is universal life insurance and there's whole life insurance.
Universal is usually sold under the name permanent insurance but that doesn't mean that it's priced where will be in force your entire lifetime. It usually has guarantees to certain age and will lapse after that age.
Whole life insurance definitely makes sense if the need for your insurance will be there your entire lifetime.
If you only have a temporary need for the life insurance such as the cover of mortgage payoff which will end in 20 or 30 years you only need term life insurance for that.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
If it makes sense or not, is up to the individual. Permanent life insurance is part of a financial plan because it makes sense to a lot of people, including myself. The problem with deciding if it's a good choice or not is how it is compared by those who don't want you to purchase it. The dreaded hypothetical 12% return mutual fund. You know, the one that goes up forever at the same return to infinity?
Permanent life insurance is boring, conservative and usually very safe. A 12% return security does not share the same characteristics as RISK is a greater issue with any security.
What an individual has to decide is if they want something that is boring and conservative as part of their portfolio? For me, it makes great sense as I want a diverse portfolio with different levels of risk so I can sleep at night. But again, that is just me. If somebody else wants to experience the highs and lows in their entire portfolio, entirely their choice.
Self-employed Employee Benefits Provider, Upland, California
Permanent Life insurance makes a lot of sense actually as part of your financial plan. There are needs for term or temporary insurance as well.
Some insurance agents will tell you that Permanent Insurance is a "rip off", and isn't needed but this isn't true.
Each of us need to determine how much insurance and what type we need.
Permanent or Traditional Whole life coverage will cover needs such as:
Last expense Benefit for funeral costs and unpaid medical bills when you pass away.
Estate Taxes for those of us with large estates.
Business Continuation Insurance
To Fund Buy and Sell Insurance for Business Partnerships ( Term insurance can be used also)
Term or Temporary Coverage is appropriate for needs like:
Mortgage Protection to payoff your mortgage in the event of your premature death.
Income for your surviving spouse and family, to adjust for life without your income.
Money to either pay or partially pay for College education for your children.
As a financial planner, I generally recommend a combination of both types of coverage for my clients
.JPG){kind=avatar}
Universal is usually sold under the name permanent insurance but that doesn't mean that it's priced where will be in force your entire lifetime. It usually has guarantees to certain age and will lapse after that age.
Whole life insurance definitely makes sense if the need for your insurance will be there your entire lifetime.
If you only have a temporary need for the life insurance such as the cover of mortgage payoff which will end in 20 or 30 years you only need term life insurance for that.
Permanent life insurance is boring, conservative and usually very safe. A 12% return security does not share the same characteristics as RISK is a greater issue with any security.
What an individual has to decide is if they want something that is boring and conservative as part of their portfolio? For me, it makes great sense as I want a diverse portfolio with different levels of risk so I can sleep at night. But again, that is just me. If somebody else wants to experience the highs and lows in their entire portfolio, entirely their choice.
Some insurance agents will tell you that Permanent Insurance is a "rip off", and isn't needed but this isn't true.
Each of us need to determine how much insurance and what type we need.
Permanent or Traditional Whole life coverage will cover needs such as:
Last expense Benefit for funeral costs and unpaid medical bills when you pass away.
Estate Taxes for those of us with large estates.
Business Continuation Insurance
To Fund Buy and Sell Insurance for Business Partnerships ( Term insurance can be used also)
Term or Temporary Coverage is appropriate for needs like:
Mortgage Protection to payoff your mortgage in the event of your premature death.
Income for your surviving spouse and family, to adjust for life without your income.
Money to either pay or partially pay for College education for your children.
As a financial planner, I generally recommend a combination of both types of coverage for my clients