Permanent Life Insurance

"Permanent Life Insurance" is a category of life insurance designed to provide lifelong coverage, as opposed to term life insurance, which offers protection for a specified period. Permanent life insurance not only guarantees a death benefit payable to beneficiaries upon the insured's death but also includes a savings or investment component known as cash value. This cash value accumulates over time on a tax-deferred basis and can be used by the policyholder for various purposes during their lifetime.

Key features of Permanent Life Insurance include:

1. Lifelong Coverage: As long as premiums are paid, permanent life insurance remains in effect for the insured's entire life, providing peace of mind that beneficiaries will receive a death benefit no matter when the insured passes away.
2. Cash Value Accumulation: Part of the premiums paid into a permanent life insurance policy contributes to its cash value, which grows over time. Policyholders can borrow against the cash value, withdraw it for personal use, or use it to pay premiums, among other options.
3. Flexible Premiums and Benefits: Some types of permanent life insurance, such as universal life, offer flexibility in premium payments and death benefits. Policyholders may have the option to adjust their premium payments and death benefit amount within certain limits based on their changing financial needs.
4. Tax Advantages: The cash value in a permanent life insurance policy grows on a tax-deferred basis, meaning taxes on the growth are not due until the money is withdrawn. Additionally, the death benefit paid to beneficiaries is generally income tax-free.
5. Higher Premiums: Due to the lifelong coverage and cash value component, permanent life insurance policies typically have higher premiums than term life insurance policies.

Types of Permanent Life Insurance include:

1. Whole Life Insurance: Offers fixed premiums, a guaranteed death benefit, and cash value growth at a guaranteed rate.
2. Universal Life Insurance: Provides more flexibility in premiums and death benefits, with cash value growth depending on the policy's interest rate performance.

Permanent life insurance is suitable for individuals seeking not only insurance protection for their loved ones but also a financial asset that can serve various purposes over their lifetime, from wealth accumulation to estate planning.