What is a Permanent Life Insurance?
Are you thinking of getting insured? Know more about Permanent Life Insurance. Find out which of the three types of Permanent Life Insurance is right for you.
Three Types of Permanent Life Insurance
1. Participating/Non-participating Whole Life Insurance.
What are the differences between the two types?
The policyholder of Participating Whole Life insurance gets annual dividends from the insurance company and they are entitled to share in its profitability, whereas the non-participating life policy does not pay dividends to the policy owner.
Although Non-participating Life Insurance has lower premiums than whole life insurance, it has fewer benefits than Participating Life Insurance.
Participating Life Insurance is a better option for those who want cash value for their investment. It has several benefits:
- The insurance company pays the policyholder dividends
- It is flexible
- Policy holder’s dividends can be used to purchase additional insurance value
- Policy holder’s premiums generally stay level for life
- Additional financial benefits according to the policy plan
If you have decided to sign up for Participating Whole Life insurance, you can select from these dividends plans:
- Dividends paid in cash
- Premium reductions
- Accumulation of interest on the dividends
- Purchase of paid-up additions
If you feel that you want this type of insurance, get a quick quote.
Term 100 is permanent insurance that covers a policyholder until the age of 100 that’s why it is called term 100. It is a great option for clients who cannot afford the premium of Whole Life Insurance because it is cheaper than Non-participating Life Insurance.
The following are the benefits of Term-100:
- The costs of Term-100 does not increase as you grow older
- It is less expensive than Whole Life or Universal Insurance
- It is guaranteed that premium will stay the same for life
- The policyholder does not need to renew after certain periods of time
Is Term-100 Perfect for you?
If you are looking for life insurance that does not increase its premium as long as you live, this is right for you. If you do not want to spend on expensive insurance and do not expect a cash surrender value this must be the perfect insurance for you.
You are allowed to choose the amount of coverage and the maximum age, but the policy varies from one insurance company to another. Some companies allow you to buy Term-100 policy until the age of 65, and others at the age of 85.
There are also insurance companies that offer additional options such as accidental death, dismemberment, or fracture insurance.
Sign-up below if you want to know more about Term-100.
3. Universal Life Insurance
Universal life insurance is an insurance policy and investment rolled into one. In layman’s term, the insurance goes to the policyholder and at the same time, the investment goes to the beneficiaries of the policyholder.
Unlike the Participating Whole Life Insurance, it does not only offer cash value and dividends, but it gives the policyholder several investment options to choose from.
Advantages of Universal Life Insurance
- Aside from ensuring your life it also allows you to invest.
- It has options on how you want to pay your premiums, it does not have a fixed premium amount.
- You can select from a wide range of investment plan depending on your investment style and your risk tolerance
- Depending on the insurance company, but generally, it is cheaper than the Whole Life Insurance
- It has options on how you want to access its cash value
Disadvantages of Universal Life Insurance
- Its structure is complex, you need to closely study the terms and conditions, or you need an experienced broker to simplify it for you.
- If you get the annual plan, the insurance cost increases as you grow older.
- Investment returns may not be certain due to market volatility and declining interest rate.
- You must have time to constantly monitor your investment to make sure that you have enough cash to value in the policy to cover the increasing premiums
- Accessing the cash value may have accompanying fees if you decide to terminate your policy.
Who should avail of the Universal Insurance?
You must bear this mind that Universal Insurance is more often sold to people who don’t truly need it. Is Universal Insurance for you? If you are a risk-taker and wanted additional investment, you can opt for Universal Insurance. If you have enough finances to contribute regularly and have the ability to choose better-performing funds, this is for you.
If you are not yet sure which type of Permanent Life Insurance is good for you, you can speak to our advisor, sign up now!
The Benefits of Permanent Life Insurance
If you are seriously considering buying life insurance for you and your loved ones, you should know some of the benefits of going with Permanent Life insurance over Term Life insurance.
The obvious reason why you have to choose Permanent Life Insurance is that it lasts your entire lifetime, while the Term Life Insurance lasts only for a pre-set specific periods such as 10, 15, 20, 25 years and so on.
Even though Permanent Life Insurance is more expensive than Term Life insurance it does not increase its premiums, unlike Term Life Insurance which increases upon renewal.
A Permanent Life Insurance has a savings component which increases the cash value, the longer you pay for your policy the greater the cash value. On the other hand, Term Life Insurance does not have a savings component therefore it has no cash value.
Permanent Life Insurance has an option that allows you to participate in the profits of the insurance company. If you purchase the Participating Whole Life Insurance product, you are entitled to a dividend from the profit of the insurance company.
Permanent Life Insurance offers an investment within the policy. If you purchase the Universal Life Insurance, it gives you the opportunity to invest in a wide range of products.
Purchasing a Permanent Life Insurance is one of the wisest decisions you can make for you and your family. To help you with your decision, you can speak to our expert. Sign up below!