MrInsurability June 14, 2017 No Comments

Life Insurance

life insuranceToday I’d like to visit once again the subject of life insurance. We’ve talked about it before, though I suspect most of us don’t love talking about it. For many, buying or thinking of buying life insurance makes the subject of death too real.

So let’s forget about that and look at it from another point of view. What might that be, you ask? Well, life insurance is an important part of a long-term financial plan. Read more

MrInsurability July 2, 2016 No Comments

Life Insurance (Part 7) Permanent Life Insurance

MrInsurability.comAs events in today’s world make it seem that more and more things that we have taken for granted, have become uncertain, people are relying more and more on long term methods of keeping their money and themselves, safe. One such method is to take out a permanent life insurance policy on oneself, either in the form of a whole life policy or as an endowment.

Is this type of insurance the best for you? Let’s find out some facts about each type and see if we can come to an educated decision.

Life insurance is, put simply, a financial package designed to protect those who depend upon you for monetary support. Remember that a life insurance policy is a legal contract. Within it are terms and conditions of the risks assumed. Any misrepresentation by the policy holder or the insured will be grounds for nullification of the insurance.

In the case of permanent life insurance, there are three important aspects to remember: the policy is for the life of the person insured; the payout is assured when the insured passes and the policy accumulates (builds) cash value.

**Note** Should the insured live to the age of 121, at that point the policy is considered to be paid in full and can be cashed in for full value.

Let’s take a brief look at how this compares to a term life policy. A term life insurance is taken only for a short period of time and payment to beneficiaries occurs only with the insured’s death. Term life insurance does not build cash.

Since permanent life insurance is for a longer period of time, however, this means that it will cost at least eight to ten times more than term insurance. Although expensive, permanent life insurance will allow the insured to take out a “policy loan” after a certain period of making regular premium payments.

You can think of permanent life insurance as a bank, where withdrawal can be done only after a specified period of time; term insurance, on the other hand, is more like gift-giving. Money is turned over to the beneficiary only in the event of the passing of the insured.

Permanent life insurance is divided into three categories: whole life, universal life and endowment. Next time we’ll look at each type of coverage and the differences between them, in order to help you make an educated decision about which type best suites your current needs. As always, your independent insurance agent can offer you the facts and prices from multiple insurance companies, instead of just one, because he/she works for you and not an insurance company!