Permanent Insurance Explained

Different Types Of Permanent Life Insurance

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Permanent insurance, also referred to as permanent life insurance, affords the policy owner the opportunity to accumulate a little cash in addition to providing a death benefit in the event of premature death. When most people today think about life insurance today they think in terms of the largest amount of cash they can leave for a spouse and children. The result is that they buy a term insurance policy. Term life insurance is the cheapest type policy you can buy. The problem with this however is that if you keep the policy for the duration and don't die there is nothing in it for you.

• Universal Life Insurance

  Universal life insurance combines a term policy with a savings plan. The amount of money you apply to savings is flexible. It does not need to ne a set amount. This policy also pays a death benefit in the event the insured dies.

• Variable Universal Life Insurance

  This policy is also considered a permanent policy as it combines an investment plan with a permanent type policy. A special license, an NASD License, is needed to sell this product as some of your money is invested in mutual funds or other equity linked products.

• Variable Life Insurance

  This policy is a combination of whole life insurance and an investment. The agent selling this product also needs an NASD License in addition to his Agents License.

• Whole Life

  This policy has been around probably from the idea of life insurance came into existence. This is the original permanent policy. Most of these policies last to age 100.

• Single Premium Life Insurance

  This policy is a variation of the whole life policy. It allows you to pay one premium and keep your policy for as long as you wish. You can turn it in to the company at any time for it's cash value.

• Limited Pay Life Insurance

  This permanent insurance policy is set up so that you can pay into it for a given number of years and pay no more thereafter. You have your policy for as long as you live.

• Graded Premium Life Insurance

  The first year you pay a smaller premium which increases every year for a given period of time, usually 5 or 10 years, then levels off. The premium remains level for the balance of the time you keep your policy. The first years premium is usually slightly more than half of the payment required for a whole life policy. When the premium levels off it is again more than you would pay for a whole life policy.