The 3 Types of Permanent Life Insurance Policies:
1. Whole Life Insurance
Caters to long-term goals by offering consumers consistent premiums and guaranteed cash value accumulation.
2. Universal Life Insurance
This was created to provide more flexibility than whole life insurance by allowing the policy owner to shift money between the insurance and savings components of the policy.
3. Variable Life Insurance
This type of insurance is generally the most expensive type of cash-value insurance because it allows you to allocate a portion of your premium dollars to a separate account comprised of various instruments and investment funds within the insurance company's portfolio such as stocks, bonds, equity funds, money market funds and bond funds.
Why Buy Permanent Life Insurance?
Permanent life insurance is used to guarantee the coverage for the life of the insured. Universal life has the most cost effective premiums guaranteed till age 121. Whole life has guaranteed cash values. Variable universal life insurance allows you to take part in the stock market, but is not guaranteed like whole life and guaranteed universal life insurance.
6 Factors to Review Permanent Life Insurance:
1. Financial Ratings of the Carrier
2. Transparency of Interest credits, expenses, and mortality charges
3. Emphasis on savings versus death benefit component
4. Maximum expenses and mortality charges
5. Interest crediting
6. The impact of expense loadings.