 | Permanent Life Insurance |
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Permanent insurance provides lifelong protection. As long as you pay the premiums, the death benefit will be paid. These policies are designed and priced for you to keep over a long period of time. So if you don't intend to keep the policy for the long term, this may be the wrong type of insurance for you.
A key characteristic of permanent insurance is a feature known as cash value. In fact, permanent insurance is often referred to as cash value insurance because these types of policies can build cash value over time, as well as provide a death benefit to your beneficiaries.
Cash values, which accumulate on a tax-deferred basis just like assets in most retirement and tuition savings plans, can be used in the future for any purpose you wish. If you like, you can borrow cash value for a down payment on a home, to help pay for your children's education or to provide income for your retirement. When you borrow money from a permanent insurance policy, you're using the policy's cash value as collateral and the borrowing rates tend to be relatively low. And unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions. You ultimately must repay any loan with interest or your beneficiaries will receive a reduced death benefit and cash surrender value. Please note that if you surrender your policy in the early years, there may be little or no cash value.
"Permanent insurance" is really a phrase used to describe a wide variety of life insurance products that contain the cash-value feature. Within this class of life insurance, there are a multitude of different products. These include Ordinary Whole Life, Variable Life, Variable Universal Life and Universal Life.
We will focus on Universal Life Insurance which is the most popular of the permanent insurance programs available today.
One of the main reasons for the success of Universal Life (U.L.) is it allows you, after your initial payment, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the death benefit. Universal Life Policies purchased through The 1-800-TERM-LIFE Financial Services Group have a No-Lapse Guarantee Feature. The No-Lapse Guarantee (NLG) is a feature of modern U.L. policies which state no matter what happens with mortality rates or insurance company investment performance, as long as minimum monthly premium requirements are met, the policy will not lapse and the death benefit will be paid to your beneficiary. Any guarantee relies on the claims paying ability of the issuing insurance company. Most universal life policies will also provide a guaranteed rate of return on your cash values, with one important exception. It is possible that you will not accumulate any cash value if any, or all, of the following circumstances occur: administrative expenses increase, mortality assumptions are changed, the insurance company's investment portfolio underperforms, premium payments are insufficient.
Contact 1-800-TERM-LIFE for additional information and specific information regarding the policy you are purchasing.
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