Although most of us don’t like to think about our own mortality, the fact is that it’s never too early to plan for it. Getting comprehensive life insurance is an excellent way to ensure that your loved ones are financially taken care of when you’re gone. However, trying to find the right policy can be a struggle. At Findinsurance.com, we want to help simplify this process. We connect you with the best companies so that you can find a permanent life insurance quote. And one of the best reasons to get a permanent plan is that you can use permanent life insurance as an investment.
Do I Need Permanent Life Insurance?
One of the first elements to consider before drafting a new life insurance policy is how long you need coverage. For example, if you’re getting insurance at 30, you will likely need it to last for more than 40 years. In that case, permanent life insurance may be the best option. Unlike term policies that can expire after 10 or 20 years, permanent life insurance will stay in effect as long as you’re paying your premiums.
However, many people don’t like the idea of paying premiums for 40 or 50 years. Instead, they would rather wait to take out a term policy that has more affordable rates, even though it won’t stay in effect for as long. However, one excellent advantage permanent life insurance offers is that it will accrue cash value over the life of the policy.
Permanent Life Insurance as an Investment
When planning for retirement, you’ll likely put money away in an account where it can grow tax-free, like a Roth IRA. However, a permanent life insurance policy can operate the same way. Every time you pay your premium, a portion of that cost will go into a cash value account. Over time, this money will collect and grow interest tax-free, making it a viable option for those who want to diversify their investments.
One of the best reasons to get a permanent life insurance policy is that you can leverage the cash value once it reaches a certain point. Most insurance companies will allow you to borrow money from your policy or use it as collateral for a major purchase (like a home). Because it’s all tax-free income, you can do a lot with it.
Types of Permanent Life Insurance
While using permanent life insurance as an investment is an excellent way to make your money work for you, the primary goal should still be to provide for your family after you’re gone. Thus, you want to know what options are available.
- Whole – if you want guarantees on your cash value and your death benefits, then whole life insurance is going to be your best option.
- Variable – for those who want to use permanent life insurance as an investment, you can tie your benefits and cash value to the performance of your policy. This means when things are good, you can make more money. However, if the stock market goes down, you could lose value. Your premiums stay the same either way.
- Universal – if your financial situation is likely to change, or you want to customize your payment plan, then universal life insurance is the right way to go. In this case, you can pay higher or lower premiums as you see fit (with specific minimums and maximums set forth by the insurer). This provides you with the flexibility to add more money to your cash value when it’s feasible or to save money when you need it.
Get a Permanent Life Insurance Quote Today
We understand how valuable having life insurance can be. We make it easy to find a policy, whether you’re using permanent life insurance as an investment or you’re more concerned about the financial protection it offers your loved ones.