Permanent life insurance is a phrase that encompasses a variety of products that contain the cash-value feature. Universal life insurance has flexible premiums, unlike whole life insurance, which allows you to add more money in when you have more and less when months are tight. It also provides lifelong coverage and support for you, your family, and your employees.

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Cash Value

Apart from the lifelong permanent life insurance protection, the cash value grows and is a great tool for retirement. You may need insurance even after the children have graduated from college, your spouse may outlive you by 10 or even 30 years and would your spouse be able to maintain the lifestyle you worked hard to achieve?

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Living Benefits

Depending on your policy, you may have living benefits. This is money you can draw from your death benefit in the case of chronic, critical, or terminal illness. If you become sick or disabled now, would you have enough money to cover your income and medical costs?

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Legacy

Would you have income to leave your children or grandchildren, or would you have enough money saved so you don’t outlive your money?

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Why do people love permanent life insurance policies? You can use the cash values, which have tax advantages to use in the future for any purpose you wish like help to pay your children’s education, to fund your retirement, vacations, down payment for a home, etc.

 

You don’t need a credit check to borrow money from your permanent insurance policy.

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Avoid Probate

Permanent life insurance plans like Universal Life policies allow you to avoid probate. If you’re liable to federal estate taxes, you wouldn’t want your heirs to have to sell off your assets to pay for estate taxes, right? Permanent life insurance is a solution. How are you to determine if you need term life insurance or permanent life insurance? The amount of insurance is determined by need and the DIME method is a way to calculate how much life insurance you need.

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Determine Your Coverage Need

DIME Method Example

D=Debt $25,000

I=Income x 10 $500,000 ($50,000×10)

M=Mortgage $250,000

E=Education $200,000 ($100,000×2)

$975,000 total coverage

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In this example, this person needed $975,000 of total life insurance coverage. A broker will be able to help you determine your affordability and need.