What Is Permanent Life Insurance?
<lingo>Permanent life insurance, which is also known as whole life insurance, is a type that remains in place long term, as long as the premiums on the policy continue to be paid by the policyholder. Unlike term life insurance, it does not expire after a set number of years. This form of life insurance may offer more benefits to policyholders looking for a long term way to fund retirement as well as their estate plans. Coverage for this type of insurance can be more expensive for some people.</lingo>
Permanent Life Insurance Clearly and Briefly Explained
Permanent life insurance is designed to remain in place long term, as long as your whole life. During that time, you will make payments on the policy to the company. As long as you keep making those payments, the policy remains in place. What makes it valuable is that, unlike term insurance, you do not necessarily have to have numerous medical appointments to keep the coverage in place. It is continuously in place, making it easier to maintain than purchasing several term life policies over the years.
<twitter>Permanent life insurance, which is also known as whole life insurance, is a type that remains in place long term, as long as the premiums on the policy continue to be paid by the policyholder. </twitter>
There are a variety of forms of permanent life insurance. Some of them provide more than just a typical death benefit paid at the time of death. They may also allow the individual to borrow from the funds during their lifetime. A portion of each premium may go towards an investment fund that builds value over the years. You may be able to withdraw dividends from the account during retirement to create a source of income.
In other cases, permanent life insurance works well as a type of estate planning tool. The proceeds from the death benefit tend to be higher than with term life insurance policies. This can provide for a way to pay for many of your goals after death, such as funding a college education, creating a trust, or even providing funds to your favorite charity. Whole life insurance policies like this are very flexible in terms of who benefits from them but can be harder to obtain if you are older.
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