Whole life or cash value are other names that are usually used to describe permanent life insurance. This type of insurance is different from term insurance in many ways. Though there are many distinct characteristics that describe this kind of insurance, there is always one specific element that is always associated with permanent life insurance. In most cases the benefit that one receives from it are all equal to the policy amount when the insurance was initiated. This kind of insurance also provides cover for the whole period until the insured person dies. Apart from these features, it is always good to know more about this kind of insurance in term of what it offers that other insurances do not.
As mention above, permanent life insurance is meant to cover all the finances of a family especially when one dies. It always does this for the rest part of family life. The other important feature about this insurance is that one can borrow money using this kind of insurance as collateral.
Due to the fact that permanent life insurance provide both the growth and protection at the same time, it is always good to request the two separately. The reason behind this is because the amount of premiums associated to this kind of insurance are significantly huge than those for term insurance premium. Apart from these huge premiums, the policies associated to it are also invisible thus becoming harder to clearly determine the potentiality of the investment in this insurance. This is always different from the term insurances that in most cases requires less investment and also one is able to control the expenses over the investment.
In most cases the cash that accumulate in permanent life insurance is not taxed unless it is withdrawn. These taxes at withdrawal period can also be avoided by taking a loan using the insurance account. The only problem with this option is that death benefits are always lowered. For those with a high earning, permanent life insurance is always the best for them as they are able to maximize their profit out of these deferred savings.
In most cases there are three kinds of these insurances. This includes the variable, traditional whole and also the universal permanent life insurance. To elaborate it more is that whole insurance always has premiums that are fixed and are also guaranteed but with limited growth, variable insurance always allows the insured to decide on how the money is invested and universal always allows the insured lower or raise the premiums for cash balance. It is therefore advisable to always seek for an insurance expert to guide on in choosing the best permanent life insurance depending on personal needs.
The fifth thing one needs to know about permanent life insurance is that for the cash value to be met, it always take several years. In most cases when one gives up before the actual time frame, there are usually some charges that he or she has to surrender. It is therefore recommended of one to wait the time to elapse in order to get the whole benefit out of the insurance investment.
