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When is a permanent life insurance policy the best option?

Friday, March 23rd, 2012

A life insurance policy insures the policy holder from death; this means that death during the validity of the policy will payout a sum of money that was assured at the time of the start of the policy. This type of life insurance does not expire or does not have a time limit. The premiums are paid at regular intervals and at the death of the policy holder the insurance company will pay out the sum of money that the policy is worth to the next of kin.

Permanent life insurance policies are usually more expensive that a term policy. This is because there is a large sum that is assured at the death of the policy holder. People prefer life insurance policies that are permanent as these policies offer whole life insurance, build cash value within the policy, there are tax rebates when one owns a life insurance policy, the premiums are usually leveled at the time of the start of the policy and one can even apply for loans against these policies. The loan is valid after the policy completes a certain term. If the premium limits are maintained then these loans against insurance policies are also not taxable. Taxes are also not charged on the earnings on an insurance policy as long as the policy is active.

A permanent life insurance policy is popular among those looking for life insurance policies. The cash values in a permanent insurance policy have a minimum assured interest rate with a death benefit amount. The principle of this type of a life insurance policy is to offer cash value with a savings and an interest component. People take out insurance policies to benefit their families after their demise and for this reason alone a life insurance policy that is permanent is an important one. If the policy holder is the major bread winner then on his demise the family will really feel the financial burden. With this life insurance policy one can ensure that the benefits of the policy help the family out.

There are many options when one looks to buy a life insurance policy. With many insurance agencies and companies having their agents who will come and explain the policy to you, buying a policy is not difficult. But, it is important to understand exactly what the policy entails and the best one for your requirements. Read about various policies and see what your family and friends recommend. Even buying life insurance policies online is possible.


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