Permanent Life Insurance


Permanent Insurance Protection
You have the peace of mind in knowing that no matter how old you are you are still covered. And if you acquire your insurance at a young age, you can enjoy really low premiums even at old age. Since the premiums do not increase for most of the permanent life insurane policies it rewards the earlier appilcants. It also makes sure that you have insurance when you need it the most- during old age. Term insurance becomes more expensive as the insured ages.

Level Premiums
Your premiums do not increase, what this means is that you can budget for your insurance costs

Cash Values (Excluding Life to 100)
The longer you wait the more the cash values

Tax-Free death benefit
Peace of mind knowing that regardless of when the insured dies, the family receives the death benefit tax free.

Policy Cancellations
Unlike universal life, policies can be cancelled at any time without any penalties, and you can even access the cash values available with certain policies.

Main Types:

Permanent insurance can get quite complicated so only the three main types are described below.

1. Life 10 or Life 20 Insurance
With Life 10 or Life 20, you pay for the predetermined period: 10 or 20 years. At the end of the period you can choose to keep the insurance and not pay anymore premiums, or if you have a financial difficulty and need cash you can acess 100% of what you paid as premuims, you will forfeit your insurance when you cash out. The longer you wait the more the cash values build. The following graph will give you an idea of how Life 20 works:

As the above example shows, you pay premiums for 20 years, after which your cumulative premiums do not increase. Your cash value grows throughout the 20 year period, and once you reach 20 years you can access 100% of what you paid. The longer you keep the policy in force the more the cash values build.

2. Guaranteed Whole Life Insurance
With whole life insurance, you enjoy all the benefits of Life 10 or Life 20 but you pay for as long as you want to be protected. Unlike life 10 or life 20 its not paid up, meaning your have to keep paying premiums but as a result your monthly premiums end up being much less than what it would have been if you opted for paid up insurance. This is great for those on a budget but still want to enjoy the benefits of permanent insurance namely cash values. See below for comparison.

3. Life to 100 insurance
The most affordable permanent insurance, all other things being equal. It is term insurance and will cover you until you reach age 100, but since it does not have all the other benefits of permanent insurance your premiums will be much more affordable. See below for comparison.

The three main types of permanent insurance summarized: