What is Permanent Life Insurance?

Answer:
Life insurance comes in two forms: temporary (term)

and permanent (whole life). Permanent life insurance is the type of life insurance that you buy for your entire life. As long as you continue paying the premiums, the policy remains in effect. In addition to lifetime coverage, permanent insurance policies often provide a savings tool that builds cash value. This cash value can be accessed either by surrendering the policy or through loans.

In general, permanent insurance is offered either as a “whole life ” insurance policy or “universal life ” insurance policy. Whole life policies usually have a fixed premium that remains the same throughout the policyholder’s lifetime. Cash value begins accruing based on a pre-determined schedule. As the cash value grows, policyholders can surrender the policy and cash out or they can take out policy loans.

Universal life insurance policies are also permanent however they allow for a little bit more flexibility on the policyholder’s behalf as their needs change. Premiums are not fixed as they are with whole life policies.


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