A life insurance policy is sometimes overlooked by many. But it must be part of anyone’s financial plan, including you.
In case of a tragedy, life insurance can protect your family financially. It has been proven to be helpful to many families.
However, half of the American adults don’t have a life insurance policy. They understood the importance of this policy but they assume that it is just an additional expense.
But life insurance is helpful for your family when you die. Your beneficiaries will get a lump sum death benefit. When they receive it, they don’t need to include it in their tax returns.
If you’re now persuaded to purchase one, you must know that life insurance has different types.
Some policies expire before you die. In that case, your beneficiaries won’t be getting anything.
What Life Insurance Policy Never Expires?
The type of life insurance policy that does not expire is permanent life insurance. But you need to pay the premiums.
This type of policy will last for your entire life so you have a way to leave behind your loved ones some financial support.
The goal of every life insurance is to protect your family. But not all policies are the same.
When buying coverage, you will be presented with two main options — permanent and term life insurance.
Term life will only last a certain period.
Permanent life insurance, on the other hand, provides lifelong coverage. But it is more expensive.
Despite it being expensive, permanent life insurance can be worth it as it offers a guarantee you can provide for your loved ones financially when you’re gone.
It builds cash value over time. Thus, during your lifetime, you may use the policy.
For instance, you can borrow from it or use the value to assist you with your retirement account.
Does Permanent Life Insurance Policy Expire?
Any type of permanent life insurance will last your entire life. It means that it stays with you from the moment you buy it until you die.
Most policies mature when the policyholder is 121 years old. So, if you reach that age, your policy ends and you are given a benefit.
Of course, for most people, the policy will pay out before it matures.
What Does a Permanent Life Insurance Accomplish?
Permanent life insurance will provide a safety net for your family. Your family will also get a financial inheritance in a form of a death benefit.
It pays out after you die.
But that’s not all it can accomplish.
Permanent life insurance lets you accumulate savings. And when you reach a certain amount, you can borrow against it through a cash loan. Or you can use it as collateral.
However, even though you can borrow against it, you still have to repay the loan. Otherwise, your policy will be canceled or your beneficiaries won’t get anything.
What is the Cost of Permanent Life Insurance?
Compared to term life insurance, it is more expensive. The reason for this is that it comes with various features and benefits that a term life can’t offer.
Term life insurance is not at all useless. This is beneficial if you want affordable protection when you need it.
For instance, if you are paying a mortgage, you can use its benefits to settle the amount.
However, if you want a guaranteed way to pay for your funeral costs, then permanent life insurance can help them financially. They have enough funding to replace your income.
When it comes to the cost of permanent life insurance, there are factors to consider:
- Health
- Age lifestyle
- The coverage
The company where you purchase this policy will consider these factors to give you an estimated cost for the coverage that you wish.
You can decide if permanent life insurance is the right investment.
Weigh the pros and cons first.
Talk to a financial consultant or consider how the policy fits your budget.
If you are still not sure, compare term and permanent life insurance quotes so you can decide wisely.
Related: How much of the life insurance loan is taxable?
What is the Main Advantage of a Permanent Life Insurance?
It gives you the security that you need for the rest of your life. You can access funds while you are still alive if you need them for a major life event.
Because it does not expire, you don’t have to purchase a new policy each time a term ends.
And after a few years of paying for it, the policy starts to accrue value that you can use.
How to Pick the Right Permanent Life Insurance?
A permanent life insurance policy never expires. But there are various types of permanent life insurance. If it is time for you to pick a policy, think about the options available and find out which one fits your life best now. And if you are looking for coverage for your awesome workers, find here the types of life insurance you can provide for your employees.
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