About 54% of Americans are covered by some type of life insurance policy. This means that 46% of American adults can possibly pass away and leave wide financial gaps in their families.
It’s possible that many people haven’t purchased whole life insurance because the topic is confusing to them. Rightfully so, many people don’t understand what term life insurance is or which form of life insurance is best for them.
With that said, permanent life insurance is a popular choice for Americans under specific circumstances. If you’re interested in learning what is permanent life insurance, this article will provide all the information you need.
What is Permanent Life Insurance?
Permanent life insurance is simply a form of coverage that extends a person’s entire lifetime. This means that if a person pays their premiums on time, they’ll be covered until they pass away.
Permanent life insurance is the opposite of term life insurance. Term life insurance requires a fixed rate of payments to be paid during a limited amount of time.
Permanent life insurance is a popular option for people who want long-term security with their insurance policy. However, permanent life insurance isn’t for everyone.
Below, you’ll learn about the pros and cons of permanent life insurance policies.
Pros of Permanent Life Insurance
If you’re interested in purchasing permanent life insurance, here are some advantages that will sway your direction:
The Cash Value of Your Policy Can Grow Over Time:
Many permanent life insurance policies have a component that will allow your policy’s cash value to grow in spite of inflation. This means that the cash value of your policy will be worth more when you die than if you bought a term life insurance policy.
You Can Enjoy Flexible Premium Payments:
With permanent life insurance, you can negotiate the terms of your premium that best fit your current situation. For example, some policies will allow you to stop making payments and still enjoy the benefits of having valid life insurance.
Other policies may make it possible for you to pay a higher premium upfront so you can lower your term. Either way, you are in complete control of your policy.
Cons of Permanent Life Insurance
Before you make a decision about buying this policy, here are the main drawbacks of permanent life insurance.
Permanent Life Insurance is Expensive:
Permanent life insurance can be significantly more expensive than term life insurance. If you don’t need coverage past a specific time, it may be cheaper to purchase term life insurance instead.
Your Policy Could Lapse:
If you can’t afford to continue making your premium payments, your policy will cancel. This means all of your hard work toward paying your permanent life insurance policy would be for naught.
You would also have to start over and buy another insurance policy, like at a much higher premium.
Ready to Make a Decision?
Now that you know what is permanent life insurance, you may be ready to make a decision. If you’re interested in learning about the life insurance policies Paradigm Life, contact us today.