With the turmoil and crisis that global economy is facing, interest in Permanent life insurance plans has been rekindled as a financial product designed to offer stability and safety to the investors or policy holders. The secret, according to insurance advisors and financial analysts, is to find a plan which is a combination of reasonable cost and rich generous dividends – but finding insurance like that might not be a very easy thing to accomplish.
The global financial crisis during 2008-09 spiked the sales of whole or permanent life insurance policies by a great extent as many investors found them the best available option for ensured yearly dividends and also for better safety. A Permanent life insurance plan requires the insurer is required to pay up a minimum annual dividend and the account remains tax-deferred for the entire duration of the policy. Whole life insurance policies normally the required insurer to deposit the premium, the less insurances cost as well as other expenses to a cash-value account. A permanent insurance policy holder can also withdraw the entire amount or a part of their investment tax free – but they are also required to follow a set of strict rules failing which the policy holders might end up making their withdrawals taxable.
A variety of permanent life insurance plans are presently available and investors do have the flexibility of choosing from single premium, interest sensitive or traditional whole life insurance plans. A traditional policy ensures that the investor get a guaranteed minimum return on their cash value account. On the other hand an interest sensitive Permanent life insurance plan can offer the policy holder improved death benefit depending upon the changing economy and return on his cash value account without increasing the premium rate. If you are looking to invest a large amount of money on a up-front life insurance plan single premium whole life insurance plans – offering cash value and tax shelter on returns might be a good choice.
In permanent life insurance a part of the premium amount goes to the cash value account of the policy holder which after a few years can pay off the entire policy. Unless you choose otherwise the premium amount also remains the same throughout the policy period and you will have coverage for your entire life without any further medical examination. But compared to investment in other life insurance plans, return on investment for whole life insurance plans is very low and you should decide depending upon your exact financial condition and ability.
