Permanent life insurance policies offer incredible benefits in your life and even after death. Hence, before choosing permanent life insurance, you need to understand all its details. It will help you make the best decision.
A majority of people have an illusion that if they want a life insurance policy, they have to opt for a whole life insurance plan. Although whole life insurance is a brilliant option, you need to know that it is not only the type of permanent coverage. Hence, it is always a good idea to know your needs and compare them with available options.
What Are the Types of Permanent Life Insurance Plans?
Whole Life Insurance
It is a type of permanent life insurance plan that features a guaranteed death benefit. Also, it is a source to save funds for forthcoming expenses like children’s college education, etc. When you pay premiums, the policy accumulates cash value that you can extract in form of a loan as per your policy terms and conditions.
Universal Life Insurance
If you are looking for a flexible life insurance plan, then a universal life insurance plan is the ideal option. It is much similar to whole life insurance as it offers cash value and death benefit. However, the plan can be modified with time to adapt it to your budding needs.
What Are the Benefits of Whole Life Insurance?
When you plan to purchase a whole life insurance plan, you should always look for a reliable insurer or company.
When you contrast term and whole life insurance plans, the bothering thing is the huge initial outlay of the latter. However, you should not overlook other benefits that outweigh term life insurance. You should explore whether whole life insurance is worth the additional pay-outs.
You will enjoy the following benefits in life if you choose whole life insurance:
You Have Access to Cash Value
It accumulates a cash value which you can extract as per the terms and conditions of the agreement. A majority of people extract cash value of whole life plans to support themselves in old age or bad times.
You Can Enjoy a Permanent Coverage
A whole life insurance plan offers lifetime coverage to the policyholder regardless of how much you live. You just need to pay premiums regularly.
You Have a Loan Surety
As a whole life insurance plan accumulates cash value, you can borrow a loan against it from the insurance company. You may use the money to establish a new venture, finance your child’s education or marriage plan, and much more.
Term Vs Whole Life Insurance
|Sr. No.||Term Life Insurance||Whole Life Insurance|
|1||Less Expensive||High Premiums|
|2||Insurance for a predetermined period. You can renew the policy at a revised premium, or you can change the policy to whole life or universal.||Lifetime insurance|
|3||Does not accumulate cash value||Accrues cash value with time, and policyholders can enjoy financial benefits|
|4||No cash value, so it does not offer any loan against the policy||Can be used as collateral for the loan|
|5||Demands limited information of the applicant||Demands detailed information about the applicant and their financial goals to determine the policy value|