Types of Permanent Life Insurance and How They Work

iQuanti: Permanent life insurance can give you coverage that lasts for your lifetime, so your loved ones will be covered if you pass away unexpectedly. If you're considering getting this type of plan, you may be wondering what your options are. Let's take a look at the different types of permanent life insurance plans so you can choose a policy that works for your financial situation and coverage needs. 

Whole life insurance 

Whole life insurance is one of the most common forms of permanent life insurance. Premium payments go toward the death benefit and cash value. Once policyholders accumulate enough cash value, they may have the option to borrow against it, use it to pay premiums or withdraw it from the account. If the policyholder dies at any point in their life, the beneficiaries will receive the death benefit.

When would I need whole life insurance? 

Whole life insurance may be the right choice for those who want long-term coverage to ensure their loved ones receive a death benefit to cover expenses after their passing. It can come in handy for individuals who have dependents with fixed financial needs, like aging parents or children with disabilities. Whole life insurance can also play a helpful part in wealth building for customers who are interested in alternatives to investment accounts.  

Final expense insurance 

Final expense insurance is a specialized policy that is designed to cover burial, memorial, and funeral costs. The cost of this insurance policy is typically low, and the approval process can be easier than it is with other permanent life insurance policies.

When would I need final expense insurance? 

If you're a senior who is concerned about some of the costs associated with end-of-life planning, then final expense insurance may be the perfect choice for you. As a permanent policy, you don't have to worry about it expiring too soon, and the affordable premiums mean you can fit it into your budget with little added cost. 

Universal life insurance 

Similar to a whole life plan, universal life plans involve a split payment. One part goes towards your death benefit, and one goes toward a savings-type account that accumulates interest over time.  

The standout feature of universal life policies, however, is your ability to adjust your premium payments as you continue to pay off your policy. With universal life policies, you can choose to change your death benefit. 

When would I need universal life insurance? 

Universal life insurance comes in handy for customers who desire more financial flexibility. As permanent life insurance policies are usually more expensive than term life plans, universal life insurance lets customers benefit from the adaptability of a more affordable policy and the lifetime coverage of a permanent life policy.

Find the right choice for your loved ones 

Not everyone needs a permanent life insurance policy, but customers who do should understand there are various options available to meet different needs. Whole life insurance, final expense insurance, and universal life insurance each offer different features and benefits that you can compare when deciding on the right plan. Whether you're looking for help in covering end-of-life expenses or want a permanent plan that can be adjustable as you grow, these life insurance policies can give you added security and ease.