Permanent life insurance is a key option to consider when exploring life insurance plans. Unlike term life insurance, which expires after a set period, permanent life insurance is designed to provide lifelong coverage. This type of policy does not have a predetermined expiration date, ensuring that your coverage remains active as long as you continue to pay the premiums.
Permanent life insurance is often known as cash value life insurance because it accumulates a cash value in addition to providing a death benefit. This cash value can serve as a financial resource that policyholders can borrow against for various needs, such as funding a child’s college education or covering unexpected medical expenses.
Because permanent life insurance does not expire, it is particularly useful for estate and retirement planning. The cash value grows tax-deferred, similar to retirement accounts. In some instances, you can borrow against or withdraw the cash value to supplement retirement income, offering flexibility in how you manage your financial needs, such as providing for dependents or avoiding changes in your tax bracket.
Permanent life insurance pays out a death benefit to the beneficiaries you designate, which can include family, friends, business partners, or charities. The death benefit is tax-free for your beneficiaries.
The premium you agree to when purchasing the policy remains unchanged for the duration of your life, ensuring no unexpected cost increases.
The policy builds cash value at a specified rate with each premium payment. You can potentially borrow against this cash value tax-free or cancel the policy to receive part or all of the cash value, subject to interest.
A permanent life insurance policy lasts your entire life, eliminating the need to convert to another policy when a term ends.
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