There are various kinds of permanent life insurance available in the market, which include whole life, permanent, universal life as well as variable universal life policies. The main purpose for getting this type of life insurance is to ensure financial continuity of your family in case of your death. Once you have decided to buy this type of policy, it will be beneficial to search for a company that offers such kind of permanent life insurance. You should check out with as many companies as you can in order to get the best rates and terms. Some of the factors that you need to consider while searching for permanent life insurance include the following:
Term life insurance: The term life insurance policy is another permanent life insurance policy that offers death benefits only for a particular period of time. The term may be from one year to 30 years. Usually the premium of this type of policy is slightly higher than the whole and variable life policies. If you want to buy term life insurance then you will have to choose the type of policy that suits you the most. The type of term life insurance policy you purchase also depends on the amount of your death benefit.
Universal life policies: The universal life insurance policy does not offer any death benefits but it does offer flexibility in the payment of premiums. You can also use this policy to create a cash value account. This will allow you to accumulate a cash value on which you can draw from at the time of a claim. Your beneficiaries will receive the lump sum of money that was deposited in the account if you die during the lifetime of the policy. Most universal policies pay dividends that are taxable.
Permanent coverage riders: If you are looking for additional permanent coverage then you may need to check out the term rider policies. Term riders provide an additional amount of the death benefit on the basis of an agreed period of time. For instance, the death benefit may be paid out once the insured annuitant reaches a certain age. In addition to the death benefit being paid out once the annuitant reaches a certain age, the premiums that would be paid may be tax-deductible.
Cash value and survivorship policies: The life insurance policies that offer the flexibility of having growth and cash value will be more costly than the permanent insurance plan. You may also have limited access to the cash value and survivorship features. When you purchase permanent insurance plans, you get access to your cash value and your premium is also tax-deductible. With a cash value or survivorship policy, your premium can be raised at anytime during the life of the policy. You will only be allowed to borrow the amount you have paid into the policy.
You should also do some research on the insurance company that you plan to purchase a permanent or term life policy from. There are some companies that offer cheaper premiums but their policies have much fewer options than other insurance companies. Term life policies last for a fixed period of time, while permanent policies are renewable depending on the prevailing circumstances. While choosing an insurer, consider the terms and conditions of the contract that you enter into.
Do not surrender charges: A surrender charge is imposed when you sign up for an insurance policy. It is an additional fee that you will pay to the insurer if you decide not to renew your contract. There is a ceiling amount that the life insurance company will charge for a surrender charge. If you ever reach the upper limit, your policy will automatically terminate and you will not receive any additional cash value.
Medical exam premiums: There are various medical exams that will be required before your insurer will issue you a death benefit or cash value. These fees are non-refundable. So if you undergo a medical exam and pass, then you will receive your death benefit or cash value but your premiums will not be refunded. So it is important that you undergo a medical exam to ensure that you are in good health and you do not smoke.