Uses of Permanent Life Insurance
Permanent life insurance is insurance that you keep for life. As long as you keep paying the premiums, the insurance does not expire.
In comparison, term life insurance covers you only for a specified period of time and all death benefits are waived off if you outlive your term. The two most common types of permanent life policies are whole life and universal life insurance. These policies also accumulate cash value along with the death benefits. This cash value can even be borrowed against or en-cashed while you are still alive. Policy holders can use this money to pay for their children's education, fund their retirement or in case of any emergency.
When compared to term life insurance, permanent life insurance coverage costs significantly more in the early stages of the policy but becomes more economical as the years go by.
Whole Life Insurance offers coverage for your entire life. After your death your beneficiaries will receive the cash benefits of the policy that can be used to pay off your taxes, mortgage, estate settlement claims, etc. As a rule, whole life insurance premiums do not fluctuate. Unlike term life policies that cost more as you grow older (except for level term), with whole life insurance, the costs are averaged out over the period of the policy.