Many people choose permanent life insurance over term life even though it costs more. But you get plenty of extra benefits for life, whereas a term plan is set for a specific period of time. Here's how a permanent life insurance plan helps build wealth for you and your survivors.
What Is the Meaning of Permanent Life Insurance?
As the name suggests, permanent life insurance is lifelong coverage for the policyholder. It's a type of plan in which the money you put in grows through investments in the stock market. It's like a savings account that pays interest, and you are able to withdraw cash whenever you need it. You can even borrow cash against your account. The key is that permanent life insurance is an asset.
Over time your permanent life insurance account grows in value. It provides a financial safety net in case you need money for an emergency. Furthermore, it can pay you if something prevents you from doing your job or earning income. In that sense, it's closer to investment than just savings.
How Permanent Life Insurance Grows Assets
Permanent
life insurance is suited for people who want to invest their tax refunds in something but aren't sure what to choose. While term life insurance is like renting an apartment, permanent life insurance is like buying a home. The apartment is a short-term concern, whereas a home can be a long-term investment.
Permanent life plans build equity over time, as they are overseen by professional fund managers. These professionals analyze market trends and make portfolio adjustments according to economic news. The stock market has moved higher every decade since the seventies.
Major Benefits to Permanent Life Insurance
- Peace of mind - You can relax that your plan delivers steady returns that typically outperform savings accounts. While there are certain risks involved in stock investing, these plans commonly deliver reliable returns.
- Multiple options - While there are four types of life insurance plans to choose from, other options to consider are coverage extensions and coverage limits.
- Lifelong benefits - Unlike a term life policy, a permanent life insurance plan provides benefits for the rest of your life in the form of cash, loans, and claims.
- Costs eventually decrease - The longer you buy into the policy, the more you'll see monthly premiums drop. At a certain point, the policy will begin to pay for itself.
- Living benefits - There are several ways you can benefit from your life insurance plan while you're alive. If you become ill, it will pay for bills related to critical care and long-term care.
- Death benefits - The plan pays for funerals and associated costs. It includes an accelerated death benefit you can use while you're alive and have a terminal illness.
Conclusion
Before you decide on life insurance, consider the different types, such as permanent life insurance, which provides the most benefits. You'll be paying more than term life insurance, but you'll get much more out of it.
Contact our experts here at
Club Agency Insurance Brokerage. We will be happy to assist you!
