Types of Permanent Insurance
Permanent life insurance includes the following:
• Whole Life Coverage – guarantees a level of premium and cash value in its policy. This type of insurance ensures death benefits, guaranteed cash values and fixed and known premiums. Mortality and expense charges will not be deducted from the cash value indicated in the policy.
• Universal Life Coverage – a relatively new product that offers permanent coverage with an accompanying flexibility paying premiums and provides the potential for higher returns.
• Limited Pay – a form of permanent insurance that requires the policy owner to pay the premiums for a certain period. Afterwhich, no additional premiums will be paid to continue the enforcement of the policy. Pay periods are usally in 10 to 20 years and are paid up when the policy owner reaches the age of 65.
• Endowments – more expensive type of insurance. The terms of annual premiums are higher than that of other forms of permanent insurance. The cash value of endowments builds up in the policy. The cash value equals to the death benefit and the face amount.