One of the more popular types of insurance is permanent life insurance, also known as whole life insurance. Unlike term policies that only pay in the event of your death, permanent life insurance combines the benefit of term policies and adds a cash value factor. With permanent life insurance, part of your premium is invested in stocks, bonds, or money market instruments. This creates a cash value that grows over time which you can borrow against or it can be part of the benefit paid to your beneficiary in the event of your death.

While the premiums for permanent life insurance are higher than that of term, permanent life insurance allows you to take money from the cash value and in some cases allows you to direct the investment of the cash value portion of the policy. The premium amount depends on the type of permanent life insurance you choose. Some types allow you to make a lump sum payment for the premium and several smaller payments; others have a fixed amount. Permanent life insurance offers flexibility on how you pay your premiums. As long as you pay the premiums and keep the policy in force, the policy will provide coverage for your entire life, or with endowment type policies until the endowment age at which time the benefit pays out to the policy owner.

Permanent life insurance can be further broken down into four types – whole life, universal, variable life, and variable universal life. Universal and whole life insurance have a fixed return, meaning the policy will draw a specific rate of return over the life of the policy. Variable life and variable universal insurance have flexible returns, where the cash value can be invested in a variety of options, known as subaccounts. These subaccounts are very similar in structure to mutual funds and each subaccount typically offers some diversified exposure to stock, bond or money market investments.

Permanent life insurance is a good option for people who have beneficiaries to take care of after their death. These beneficiaries include:

• Children under 18 years of age
• Dependents that have a physical or mental disability that need a certain standard of care
• Surviving spouses

Permanent life insurance gives you death benefits and allows you to access the cash value of the policy. While permanent life insurance has higher premiums than term, it provides greater value and flexibility.

For questions regarding permanent life insurance and other life insurance for seniors choices, talk to an expert at Puritan Financial.

Puritan Financial Companies is a diversified financial services firm specializing in helping people from their peak earning years through retirement to secure their financial future. Visit Puritan Life Insurance at www.puritanlife.com. The information contained in this blog post is for informational purposes only and should not be construed as legal, tax, or investment advice.