Pros and Cons of Permanent Life Insurance
Permanent life insurance or a whole life insurance policy, as it is often called, is life insurance that offers financial coverage for the beneficiary in the event of the policy holder’s death. As the name implies, it is coverage that is permanent, as long as life lasts. The premiums usually remain steady during the entire period. One of the main advantages in a permanent life policy is that it accrues cash value over the years. In some policies, cash value can be used to pay off premiums in the latter years of the policy.There are pros and cons to every subject and permanent life insurance is no exception. If you are considering purchasing a permanent life policy, here are a few pros and cons you should consider:Pros
A permanent life policy accrues cash value. It may not give you the same kind of profitable returns as a mutual fund or other investment options, but it does add investment value for money that you pay as premiums.It is permanent. You have the safety of coverage for life.The premiums are fixed. You do not have to worry about rising premium rates for your entire life.You can surrender the policy at any time, and receive a full refund of premiums paid to date along with the cash accrued.You can withdraw from a permanent life policy. If situations in your life arise requiring the need for extra cash for unplanned expenses, you have the option to withdraw from your whole life policy, tax free.Permanent life policy can be used as collateral against bank loans.After an initial stipulated period of perhaps six months, a permanent life policy does not lapse, even if premiums are not paid. Premiums will be paid using the cash value accrued. However, your death benefits may be altered because of lapse in premium payments.ConsYou may not need coverage for life. Most people need life insurance coverage when they have debts to pay, or families to support. People in their senior years may not need coverage at a time in their life when kids have grown and do not rely on parents for their financial support.When compared to term life insurance, premiums for permanent life insurance can be four to ten times more expensive. If you’re on a low budget, permanent life insurance may not be a suitable option for you.The extra you pay in premiums for a permanent life policy could fetch you higher interest if you were to invest that same amount in an investment of your choice. Permanent life policies do not allow you to control the investment choices. This is left to the prerogative of the insurance company.There are no added benefits combined to a permanent life policy, such as retirement benefits, etc.Withdrawing money from a permanent policy can be a complicated, time-consuming procedure when compared with bank withdrawals.Outstanding premium payments, or withdrawals on your policy will reduce the face value of the policy.Premiums need to be paid lifelong, or at least up to age of 100.A whole life or permanent life insurance policy has some unique advantages. For those who can afford the premiums, it certainly offers you benefits that better suit long term financial planning. It is certainly a good option if an individual needs tax benefits and cash value along with protection for loved ones.Online insurance quote providers can quickly provide you the best quotes from reliable insurance companies based on your specific needs. If you are not sure which type of insurance policy would best suit your personal situation, many online insurance quote providers offer professional support services with knowledgeable representatives who can help you with your queries and recommend the best policy for you. It is advisable that you look for sites that are not affiliated to any particular insurance company in order to receive professional and unbiased advice. Make sure you use sites certified by the Better Business Bureau for a safe experience with internet insurance quote providers.
About AccuQuote:AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.
About the Author
Denise Mancini-Blonda is manager of public relations and marketing communications for AccuQuote. In addition to overseeing all corporate media relations, internal executive and employee communications, she plays a key role in the overall content development of the company’s online and offline marketing campaigns. This entails overseeing and implementing AccuQuote’s social media, blog and podcast strategies, as well as its word-of-mouth marketing campaign.