A permanent life insurance policy is a type of insurance plan that offers lifetime coverage and has a cash value component. Unlike term life insurance, permanent life insurance is expensive and is free from tax until money is removed from the account. Without further ado, the following are the types of permanent life insurance policies in the marketplace.
Whole life insurance
Whole life insurance comes with a life insurance component and a cash value component. In whole life insurance, the premium is fixed and only the insurer can decide where to invest the cash value. Nevertheless, the insured can use the interests from the cash value to pay their premium. They can also borrow loans from it. Read more.
Variable life insurance
Variable life insurance and whole life insurance are like brothers are sisters. Both of them has a cash value component; however, in contrast to whole life insurance, variable life insurance gives policyholders the freedom to invest their cash value in any investment vehicles (stocks, bonds, mutual funds, etc.) they want. More so, the insured are entitled to earn all the profits they make from their cash value. Read more.
Universal life insurance
Universal life insurance is very similar to variable life insurance. The only difference between the two policies is that the former allows you to earn any percentage of interests on your cash value while the latter allows you to get a fixed interest on your cash value.
Survivorship life insurance
This is also known as joint life insurance; it is mainly designed to provide coverage for married couples. Apart from having a cash value component, beneficiaries of survivorship life insurance can only receive the death benefits only when the couples are no more. Read more.