Permanent Term Life Insurance – Get Real
There is no such thing as permanent term life insurance. You either buy permanent life insurance or you buy term life insurance. Term life insurance is not permanent because a term is set at the time you buy it starting at ten years and going on up to thirty years. At the end of the term you will have to reapply for a new policy.
Permanent life insurance has no set term to it and you pay a higher premium. Permanent life insurance also has the option of a cash value aspect to it. So a permanent life insurance policy is more of an investment than a term life insurance policy.
The number one reason people buy life insurance is for income replacement. The first thing you should do even before you talk to you insurance agent is assess what your insurance needs are. Some sites online offer free assessment tools to do this easily. You just punch in all the information they ask for and in just a few seconds they will estimate the amount of life insurance you need to purchase.
You should do yourself a favor and revisit your policy with your agent at least every five years or so to make sure you are not over or under insured. People’s lives change and so do their insurance needs. As you get older your insurance needs should decrease because you no longer have young children to look out for.
So unless you are protecting a business venture or if the policy is to go toward paying taxes on a large estate, you may want to consider the less confusing and less expensive
term life insurance policy.
Term life insurance is very easily shopped for online. Permanent, or whole life insurance is best discussed face to face with your agent so you can give a better picture of what your needs are. To minimize confusion about all the outcomes that are possible with permanent life insurance, agents use a 15-plus page pre-approved illustration format. So be prepared to sit awhile when buying your either permanent term life insurance.
Keep in mind that cash value policies can have harsh penalties for surrendering the policy early. Make sure you can afford to pay the higher premiums of the permanent policy you buy otherwise it will cost you.
As stated above, a permanent life insurance policy allows a cash value to increase over time. If the amount of cash value in your account gets big enough you can elect to have the insurance company use that money to pay the premiums and you will be considered paid up. If you should happen to need some extra money you can still get the cash out, you will just have to start making payments again or settle for less death benefit.
So, you can have a permanent life insurance policy or you can have a term life insurance policy but you cannot have it both ways. Permanent term life insurance does not exist.
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