Permanent Life Insurance is a form of Individual Life Insurance that does not have an expiration unlike Term Life Insurance. The policy for Permanent Life Insurance is valid for the life of the insured and does become payable upon the end of the policy – upon death. This kind of Life Insurance however combines a death benefit with a savings portion. The investment component of this type of policy allows the ownerinsured to withdraw or borrow the cash value within the policy to meet future goals.
 
There is a waiting period after purchase of Permanent Life Insurance Policy in case the owner wants to borrow against the savings portion of the policy. This is because there is a certain amount of time needed to accumulate the cash value that you can borrow against this type of policy.
 
Those who prefer this kind of policy usually enjoy favorable tax treatment because the cash value for Permanent Life Insurance policy grows on a taxdeferred basis. This means that as long as the owner maintains an active policy, heshe does not need to pay taxes on any earnings in the policy. Permanent Life Insurance policy does require premium limits but the cash value taken out of the policy is not subject to tax since policy loans are not considered “taxable income”.
 
Different Types of Permanent Life Insurance
 
1. Whole Life Insurance is a kind of Life Insurance Policy that remains effective for the entire life of the owner or the insured. It is also known as Whole Life Assurance Policy and does require premium payments every year through the life of the policy. Some arrangements with this type of policy sometimes allow the owners to have the policy fully “paid up” with a single large premium or in as few as 5 years time. When this happens, the owner is no longer required to make further payments. There are different types of Whole Life Insurance. Learn More >>
 
2. Universal Life Insurance is another type of Permanent Life Insurance that is based on “cash value”. It is a flexible type of insurance that offers owners the lowcost coverage of termlife insurance and a savings function or element of an investment that builds up its cashvalue at a given time. Unlike Whole Life Insurance, this policy allows the owner to use the interest of hisher accumulated savings to pay premiums. This kind of policy allows the policyholder to shift money between the insurance and savings elements of the policy. Learn More >>
 
3. Limited Pay Insurance can give you a lifetime coverage with only a limited number of premium payments. This premium payments are distributed over a shorter period of time compared to other types of insurance plans and because of the shorter time interval for premium payments, the owner or the policyholder is pushed to pay higher premiums than other types of Life Insurance Plans. Learn More >>
 
4. Accidental Death Insurance is also known as AD & D or Accidental Death and Dismemberment Insurance. This is a type of insurance policy that pays the full amount of proceeds to your beneficiaries if you die as a result of a fatal accident and not due to any illness. This type of insurance policy covers your back pocket and gives you a peace of mind in case you have convinced yourself that you can never be sure what you may die of and when.