A Comparison of Permanent Life Insurance Policies

A Comparison of Permanent Life Insurance Policies

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

 

The Importance of Life Insurance

The Importance of Life Insurance

It is an undeniable fact that choosing a life insurance plan is one of the most crucial financial decisions. Regardless of your current financial situation, nobody can predict the future.

How Important Life Insurance is For You?

Safeguarding Your Family After Your Death

A life insurance policy is designed to provide financial protection to your family after you pass away. It can replace your income, pay for your child’s college fee, source mortgage payments, and much more.

Paying Debt

If you have a property loan, car loan, personal loan, or credit card dues, a life insurance policy can help your family pay for your financial liabilities if you pass away.

Secure Your Long-term Goals

As it is a long-term investment, it can help you fulfil your long-term goals like purchasing a home, planning your retirement life, and much more.

Investment Opportunity

A few life insurance policies provide you with various investment opportunities. You should be mindful of the potential risks and returns before investing.

Affordable When You Purchase at a Young Age

If you are single, you can purchase a life insurance policy at affordable premiums. At a young age when you are in good health, you can secure your future.

Safety Net for Your Business

Life insurance plans not only to protect you and your family. In actuality, a few insurance policies also protect your business venture.

Help Save Tax

If you purchase a life insurance plan, you can save taxes. The premiums you pay to the insurance corporation are eligible for a tax benefit.

Enjoy Peace of Mind

When you have a life insurance policy, you are investing in securing your financial future. Hence, in difficult times it will act as a support for you and your loved ones. Most life insurance policies have flexible terms and allow saving in form of cash value. Hence, you can use the death benefits of life insurance policies for any purpose you like. Also, if you want money during your lifetime, you can avail of the cash value saving.

Forced Saving for Your Future

Most life insurance policies require monthly premium payments. The premium is higher than the amount required to insure you. The additional funds are invested and accumulates as cash value. You can borrow the cash against the policy, or you can withdraw income from it.  

Secure Your Future

If you purchase a life insurance plan, you may feel it as an extra financial burden, but life is unexpected. You will encounter an accident, fall ill, or may face a financial loss. The life insurance policy will protect you in all such circumstances. It will also protect your family after your death. Also, the life insurance riders make your policy more valuable and convenient. You just need to discuss your requirements with a trustworthy insurance agent to decide how much life insurance I need.