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With over 76 years of experience, The Jordan Insurance Group is an industry leader in Life Insurance strategies and Employee Benefits. We strive for excellence through our due diligence in selecting products to satisfy our clients’ needs with proven benefit designs and tax strategies. Our Team utilizes a diversified multi-level approach in preserving, protecting and growing wealth for our business and individual clients.
PERMANENT LIFE INSURANCE 101

The Jordan Insurance Group, MD, Life insurance

Is Permanent Life insurance for you? This type of coverage, unlike Term Life, does not expire and provides a tax-deferred investment or savings component ("cash benefit"), as well as a death benefit. As a rule, Permanent Life makes sense as a savings vehicle for high-income families, or those - such as small business owners - with illiquid estates, who want to pass along cash to their heirs.

If you're considering Permanent Life, here's what you should know:
  1. Types of policies.
    1. Whole Life charges a fixed premium to fund a guaranteed cash benefit and death benefit; the shorter the pay period, the higher the premium.
    2. Universal Life offers a flexible premium that combines a Term Life policy with a bank account. You pay as much as you want, with the leftover funds earning a variable interest rate.
    3. Variable Universal Life works the same way, except that you can choose mutual fund-type options for investing your cash value.
  2. Medical exam: As with Term Life, the insurance company will require you to take a physical examination. If you have a medical problem, you'll probably pay higher premiums,
  3. Investment benefits: You won't owe state or federal taxes while the policy's cash value grows until you make a withdrawal (at which time your tax rate will probably be lower). What's more the "forced savings feature - requiring you to pay premiums - creates a financial safety net.
  4. Costs: Because Permanent Life funds the policy's cash benefit, as well as a death benefit, you'll pay significantly higher premiums than for the same amount of Term coverage. Permanent Life also sets sales, administrative, and fund-management fees, as well as a mortality risk charge. In addition, if you cash in the policy during a certain period (usually 10 or 20 years) you might have to pay a surrender fee.
For more information on Permanent Life insurance, please feel free to get in touch with us at any time. Content provided by Transformer Marketing.
William Jordan
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