Tips and Advice

What is Permanent Life Insurance?

There are three types of permanent life insurance, before you choose one make sure you know what your premium will be covering.
life insurance application
By Christie Petersen
Updated on: November 10th, 2022

life insurance application When it comes to choosing life insurance what you’re usually looking at is how much you’re paying each month. Once you’re older or start a family you’ll start to think more about what the policy is going to cover.

Permanent life insurance is one of the options you might consider, but you have to know what kind to sign up for and what is being offered. First off there are three types of permanent life insurance; universal, variable universal, and whole life insurance.

  • Whole life insurance covers, well, your whole life. You’ll pay a premium each year and are likely to receive both a cash and death benefit.
  • Universal life insurance is more flexible in terms of the premium you pay. This means you can pay as much as you want; any amount you pay after you’ve covered your premium works sort of like a savings account accruing interest.
  • Variable universal is similar to universal except that the ‘savings’ account is more of a mutual fund type of account that you can invest. How well it does depends on how well of an investment you choose.

Whole life insurance is usually seen as an investment as your policy could make you money that you could actually borrow. Part of the reason whole life insurance is more expensive is because of that investment component, you’re not just paying for the insurance.

Choosing a good life insurance policy means research and looking into a solid investment choices. Using a professional might be the best way to go about finding the best permanent life insurance policy for you, and if you’re choosing it through your employer make sure they are a solid investment as well.

To learn more about permanent life insurance visit Fox Business.