What Is Whole Life Permanent Insurance?
<lingo>When purchasing life insurance, individuals can choose from term and whole life permanent insurance. There are many variations between the two forms. Whole life permanent insurance is a policy purchased with the intention to maintain it long term, potentially for the rest of the policyholder’s lifetime. By comparison, term life insurance is taken out for just a specific amount of time, such as 10 years or 20 years. Often referred to as just whole life or permanent life insurance, these policies range widely in terms of features and costs.</lingo>
Whole Life Permanent Life Insurance Clearly and Briefly Explained
Whole life permanent insurance offers some key benefits. It allows for the policy’s death benefit, which is paid at the time of death, to always be available as long as the policyholder continues to make premium payments on the account. As such, it can be a component of estate planning in the long term.
Some forms of whole life insurance are designed to provide other benefits. For example, a portion of the funds paid through the premium is used to pay for administrative costs and the death benefit. However, another portion is invested and, depending on how that investment performs, and it may be possible for the policy to pay out in the form of dividends for the policyholder, create a stream of income. This can be used for any need, including helping to fund retirement years.
<twitter>Whole life permanent insurance is a policy purchased with the intention to maintain it long term, potentially for the rest of the policyholder’s lifetime.</twitter>
Whole life permanent life insurance can be more expensive than term life insurance. However, the sooner in a person’s life it is purchased, the more affordable it is likely to be. Most of the time, these policies can be excellent investment options for those who want to earn more than just to carry a death benefit. At the same time, they can also be beneficial because they allow the policyholder to maintain the coverage and, in some cases, borrow from it throughout their lifetime.
Whole life insurance like this remains in place as long as the premiums continue. This can also minimize the risk of being unable to qualify for coverage due to a person’s age or health.
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