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Aug 10

Permanent Life Insurance, Whole Life Insurance

Whole Life Insurance and Final Expense Leads – with Senior Sales Communications

Senior Sales ComLife Insurance policies are often also called Permanent Life Insurance policies. This is especially true in the case of insurance policies like Whole Life Insurance or with policies where there is no endowment age applicable to the policy. Endowment age is the age at which the sum total of cash value would equal the total death benefits as per the life insurance policy contract. For insurance policies like whole life insurance policies, the endowment age is usually set to 100 years.

Permanent life insurance policies are policies where cash value payouts are guaranteed. This holds true as long as premium payments are made as per the pre-determined schedule and the policy remains active. In a permanent life insurance policy, the total cash value is guaranteed on expiry of the insurance policy. In contrast, the other form of life insurance policy is Term Life Insurance Policy or Temporary Life Insurance policy. In this form of life insurance, the policy is bought for a fixed term or a fixed number of years. Most common terms of term life insurance policy purchase are from 10-30 years in additions of 5 years or 10 years. So most individuals purchasing term life insurance policies buy it either for 5, 10, 15, 20, 25 or 30 years. With term life insurance policies, payout of the cash value a.k.a. the death benefit happens only if the insurance policy holder dies during the term of the policy. In this case, if the policy holder dies even one day after the expiry of the policy, there would be no death benefit payout given to the beneficiaries. Once a temporary or a term life insurance policy expired, it can be annually renewed with additional payments.

Permanent life insurance was first introduced in the 1700s. It was then a product which had a fixed return for a fixed premium.

This was known as Whole Life Insurance policy. Based on this basic concept of life insurance, several variations of this policy came into effect through the years since then. Towards the later years of the 20th century, one version became extremely popular in the United States. This was called the universal life insurance policy. Universal life insurance policies provided the insurance holders with a lot of flexibility. Policy holders had flexibility with regards to premium amounts that needed to be paid every month. Policy holders also had flexibility around the timing of the premium payment. For premium payments, the maximum limit of a premium payment is decided by the Internal Revenue Service also known as IRS.

In certain versions of the Whole Life Insurance coverage policy, individual policy holders were also often allowed to cash out the amount of the insurance policy. This is not the same as availing a loan against the security value of the insurance policy. The encasement of the cash value of the insurance policy would however be without any interest amounts to be paid back. Whereas in the case of availing a loan against the security value, the provision of loan is usually associated with interest payments too. In whole life insurance policies, encasement is not permissible. In whole life insurance policies, if there is a requirement of money, individual policy holders have the option of availing a loan against the cash build up or security value of the insurance policy.

The other variation of Whole Life Insurance coverage policy is called Variable Universal Life Insurance coverage. This is also often referred to as Linked Life Insurance or Linked Life Assurance policy. This policy is quite similar to the whole life or permanent life insurance. However, in the case of Variable Universal Life Insurance coverage, individual policy holders have the option of investing the security value in other accounts like stocks or bonds. This can prove beneficial to the individual policy holder if the rate of return can fetch higher returns than the fixed returns whole life insurance policies. However, this would also end up transferring risk to the individual policy holder because the investments in the stocks market or in bonds may or may not perform well.

Permanent life insurance programs guarantee payouts in all cases. Because the payout is guaranteed, the premium payment and overall cost of the policy is also higher if compared to term life insurance or temporary life insurance policies. This could lead to many individuals choosing term life insurance because the payments are lower and the overall cost of the insurance is lower.

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