Permanent life insurance is the only plan specifically designed to be in force when you die. Most permanent plans mature (or endow) at age 100 which fully exceeds the average life expectancy of most individuals.
Permanent life insurance plans charge a risk or mortality premium plus and extra amount to build up reserves designed to keep the policy in force as the policyholder ages. These excess premiums are reflected as cash value in most plans.
Permanent life insurance can be used to fulfill financial strategies in indemnification, income or inheritance planning. Permanent indemnification and inheritance products are participating whole life and guaranteed universal life insurance, both issued for as a single life and second survivor. Permanent income products are participating whole life insurance and current universal life that credits an interest rate, index and separate sub account equities/bonds performance.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Death is an inevitability not a probability. For that reason companies issue permanent life insurance policies. These are policies that will be in force on the day that you die as long as you pay the premium. The way that the companies keep this promise is to collect more money than is necessary to meet the cost of insuring a person for the coming year and hold that in reserve. As the reserve increases the need to purchase insurance decreases. There are “permanent policies” which may accept less in the early years but will require more to remain permanent in later years.
There are two categories of life insurance: term and permanent. Term insurance is designed to stay the same price for a set number of years, then it either ends or the price goes way up. Permanent insurance is designed to stay in effect for a lifetime. Permanent insurance can be paid on a schedule over a lifetime, or it can be paid in a lump sum, or for a set number of years (after which the policy is paid up and still in force even though no more premiums are paid).
Permanent insurance policies include Whole and Universal Life, and variations thereof. The way the policy works depends on which type of policy you pick, but they all have a death benefit and cash value. Whole life will always cover you for a lifetime, but you must get a guaranteed no lapse universal life policy to make sure UL is truly permanent coverage.
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Permanent life insurance plans charge a risk or mortality premium plus and extra amount to build up reserves designed to keep the policy in force as the policyholder ages. These excess premiums are reflected as cash value in most plans.
Permanent insurance policies include Whole and Universal Life, and variations thereof. The way the policy works depends on which type of policy you pick, but they all have a death benefit and cash value. Whole life will always cover you for a lifetime, but you must get a guaranteed no lapse universal life policy to make sure UL is truly permanent coverage.