Life Insurance Question Colorado CO
Reader’s Question:
Hi! I am a regular visitor of this website and as usual, I’m here again to ask about the types of permanent insurance. Please provide me more information. God Bless!
Linda
Denver, CO
Hi Linda, so it’s you again.
Thank you very much for patronizing this website. I’m happy to hear that this website can help you because that’s actually our purpose of posting a forum here.
Permanent insurance has three types; these are whole life, universal life, and endowment.
Whole life insurance gives level premium and a cash value guaranteed by the company. The main advantages of whole life are guaranteed death benefits; guaranteed cash values, fixed and known annual premiums, and mortality and expense charges will not decrease the cash value written in the policy. The premium inflexibility and the internal rate were seen the disadvantages of whole life are premium than other saving alternatives, policy repayments are not competitive. To have more death benefits they avail a rider and pay an extra premium.
Universal life insurance is a new insurance product aim to provide permanent insurance coverage with much flexibility in premium payment and the capability for a higher internal rate of repayment. A cash account is included in this policy. The monthly Premiums higher the cash account. Interest is paid within the policy on the account at a rate mentioned by the company. This rate has a guaranteed minimum but mostly higher than that minimum. In cash account the mortality charges and administrative costs are charged. The surrender value of the policy is the amount left in the cash account less applicable surrender charges, if there is.
Endowments are policies in which the cash value built up inside the policy, equals the death benefit at a certain age. Endowments are much more expensive than either whole life or universal life because the premium paying period is shortened and the endowment date is earlier. In addition, after the specific age of the insured, the company will pay whether the insured lives or dies.
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