3 Reasons You Should Buy a Permanent Life Insurance Policy
Life insurance is a form of coverage everyone needs to have. It gives whoever holds the policy an extra layer of financial protection and stability.
Their family also benefits should they choose to sell the policy or upon the holder’s death. Out of the various types of life insurance, permanent is what most people go for and for good reason.
Here are three reasons you should buy a permanent life insurance policy.
Protection for a Lifetime
Permanent life coverage is exactly as it sounds; you are insured for life even after death. This is something a term policy can’t do. If time runs out on your policy, you will no longer be insured. With a policy that lasts between 30 to 50 years, you’ll always have peace of mind that your family is protected in the event of your passing. What’s more, is that permanent coverage doesn’t have fluctuating premiums and will not be canceled if you happen to become life-threateningly ill. You must, however, keep up with payments to keep the policy active.
Build a Cash Value While You’re Alive
Another benefit of getting a permanent policy is being able to build up the cash value over time. As you continue your monthly or bi-monthly payments, the value of your policy continues to increase. After a set amount of time, you can even borrow money from your life insurance should the need arise. This means that you can use your coverage similar to taking out a loan. However, remember that there is a limit to how much you can take from it. This limit is dependent on how much value the policy has accumulated and any cash-out limitations.
Something else you need to be aware of is that missing out on payments can affect your coverage. If you have any missing payments, it can add to the interest rate, which can and will be deducted from the initial payout. Do your best to stay current with your payments and should you happen to miss a payment, pay it back as soon as you can. You should also let your carrier know if you’re having financial difficulties.
Another benefit that many life insurance buyers aren’t aware of is how flexible the coverage is. We’ve already gone over accumulating value and being able to borrow against it. However, what you can do is sell the policy. There are a lot of reasons why people do this, which vary between policyholders. It’s possible that your marital status has changed, or you may need money for long-term care.
For example, if you purchased coverage out of last-minute necessity and you no longer need it, you can sell it back for a lump sum. The exact amount you get back from selling it depends on how much the policy is worth and how much you’ve paid into it. You’ll usually receive a 25 percent cut of the total amount of coverage. Buying a permanent life insurance policy is one of the best investments you can make.
It can help out in a pinch and provide security to your family in the event of your death.