Permanent Life Insurance
For many of us the thought of having a life insurance policy is not a pleasant one. To get life insurance for yourself is in a way to accept that you are going to die one day. And however much truth that does contain, it is always hard to accept such a fact. But at the same time none of us would want to see us our family landing up in acute financial distress after we pass away. Nor would someone like to see his long-term business partner face a severe financial crunch because his business partners untimely death. Getting a permanent life insurance policy solves such problems.
What is Permanent Life Insurance?
Permanent life insurance gives coverage in the event of your death. The insurance is valid as long as you live and you pay your premiums. It never runs out of term. Another great thing about permanent life insurance is you get to pay the same premium all your life. No matter if there has been a war or the economy is going through severe depression, you will have to pay only the amount that you and the insurance company had agreed upon at the beginning of the agreement. What this means is that with a permanent life insurance in place you can think about planning other aspects of your future.
Benefits of Permanent Life Insurnace
Apart from insuring you for your whole life, permanent life insurance also offers you several benefits. We list a few benefits below.
- Protection from mortgage: In case you have had a mortgage the money from your policy can be used to pay off the mortgage. Similarly any other debts you may have can be paid from the life insurance money.
- Funding after retirement: Once you retire and you feel you can do with a few extra dollars you can obviously access your cash values. But that would mean that the value of your death benefit will get decreased.
- Funding charities: It might always have been there in the back of your mind to help a charitable organization. But probably you believed you never had enough money to make a significant contribution. Well, here is your chance. You can assign a certain part of your permanent life insurance to a charitable organization.
If the company with which you have your insurance has had a very successful business year its board of directors might consider providing a dividend to all its consumers. This however is not guaranteed. But if you are lucky you can get dividends against your permanent life insurance. This dividend you can take in the form of cash, use it to buy a new policy, or you can use the dividend to lower the premium you pay.
Another advantage of permanent life insurance is that the money your beneficiaries receive is usually free from federal income tax. So you will at least have the comfort that you are not paying taxes even after your death. Some consolation.
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