Answers to questions you may have about permanent life insurance.
Permanent life insurance is coverage that’s designed to last an entire lifetime and pay out a death benefit, no matter how long you live, as long as premiums are paid and the contract retains its value. The two primary types of permanent life insurance—whole life and universal life—are designed to meet different needs.
“Whole life provides a guaranteed death benefit, a guaranteed cash value and a premium that will never increase,” says Ryan Schwingler, a life insurance products consultant at Thrivent. “Universal life also provides permanent protection through a death benefit but allows more flexibility in cash value and the premium.”
Is it possible to increase permanent life insurance coverage?
It may be possible to increase coverage once your contract is in place, but it will be dependent on your health, Schwingler says. However, with a guaranteed purchase option (GPO), you are guaranteed the option to purchase additional coverage. Both GPO or GIO (guaranteed increase option) are riders* available for an additional cost on contracts and are a great way to protect the insurability of children or grandchildren, he adds.
How does my permanent life insurance contract grow with me?
Cash value is the savings portion of permanent life insurance. “The death benefit is the most important feature of permanent life insurance, but a contract’s cash value may accumulate depending on the type of coverage,” Schwingler says. It can be used to sustain coverage, it can be withdrawn, or it can provide a source for a loan.
Why could permanent life insurance be right for me?
Many people view permanent life insurance as a way to pay for their funeral, but according to Schwingler, even in retirement, the death benefit can help replace lost Social Security or pension income. Permanent life insurance is also a wonderful way to leave a legacy to your loved ones, church or favorite charitable organization.