Permanent Life Insurance
Permanent life insurance is also known as cash value life insurance because it provides insurance protection for your lifetime, as long as premiums are paid. Even though premiums are higher initially, cash value life insurance can actually be less expensive than term in the long run. Most permanent policies are eligible for accumulation of account values through an interest crediting rate or through various investment fund options. Some permanent policies offer the option to apply current and accumulated account values towards payment of all or part of the premiums. If account values are sufficient, out-of-pocket premium payments may end or be reduced after several years, yet coverage can continue for life. So while premiums must be paid under both the permanent and term insurance plans, long-term out-of-pocket cost of permanent life insurance may be lower compared to the total cost for a term policy.
In addition, the cash value—part of which is guaranteed under many policies—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. Also, if you decide to stop paying premiums and surrender your policy, the guaranteed policy values are yours.
To see if permanent life insurance makes sense for you—
