Permanent life insurance is a policy that provides you with several benefits. Typically, individuals buy it and maintain it for years, or the rest of their life. By comparison, term life insurance spans a set number of years, such as 10 to 20 years. When choosing which type of coverage to buy for yourself, invest in a policy designed to meet your goals. Let's take a look at what makes permanent life insurance best for some people.
Long-Term Protection
The best reason to buy permanent life insurance is because you are young and have a full life ahead of you. You may have financial obligations. You may have dependents.
When you purchase this type of policy at a young age, chances are you are still in good health. This means you are a low risk to the insurance company. That means lower rates for you. When you lock in a low rate at the start of your policy, it tends to remain more affordable long term.
You Want to Earn from Your Insurance Policy
Not all permanent life insurance policies offer this benefit. Many do, though. Over time, the money you invest into the policy builds in value.
Eventually, these plans might build enough value that you can draw from it. The dividends are much like any other investment income. You can hold off withdrawing it or use it as a stream of income during your retirement years.
You Want to Leave Money Behind
One of the best ways to use permanent life insurance is to achieve your goals after your death. Because these policies tend to build in value, they might have a higher payout at the time of death, beyond that of the death benefit. This means you may be able to accomplish more with those funds. You may want to:
- Fund your business for years after your death
- Use the funds to establish a charity or a scholarship
- Pay for your loved one’s education and needs
- Pay off the debts of others
- Leave money behind to further your other goals
It can be a part of your estate plan. Work with your insurance agent and estate planner to create a contract for these goals.
Permanent insurance is ideal for anyone who wants to have long-term financial protection in place for their family. The younger you are, the better it is to purchase this form of insurance over others. Nevertheless, you should compare the costs, benefits, and details of any plan before you decide to buy this form of insurance over others.
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