No Medical Exam Permanent Life Insurance

What is Permanent Life Insurance?

Permanent life insurance, also often called whole life insurance, is a form of life insurance in which the policy lasts for the life of the insured and the payout is received at the end of the policy (when the insured party dies). One of the unique aspects of permanent life insurance is that the policy accrues cash value over time. With term life insurance, the death benefit is only paid if the insured dies during the time for which they are insured. Since permanent life insurance lasts for the rest of the insured party’s life, the death benefit is guaranteed. Because of this, as well as the cash accumulation, permanent life insurance contains higher premiums (typically 8 to 10 times higher than similar term life insurance).

Things to Consider Before Buying Permanent Life Insurance

  • It can be a good investment – the cash that accrues over time is not taxed until it is withdrawn
  • There are different types – traditional, universal and variable. Traditional has a fixed premium, universal allows you to adjust your premium and variable allows you to choose how that cash is invested.
  • Switching policies will cost you – it takes time for the cash value in the policy to match the premiums you have paid, plus possible surrender charges in the early years of the policy.
  • It is more coverage than most need – permanent insurance has an investment component with the accumulation of cash, but a policy may be more expensive than you truly need.