There are several types of permanent life insurance. The three explained below are the most common.
There are two types of universal life policies, guaranteed and non-guaranteed. Both policies build up cash values and use bonds as the investment vehicle for safe average returns. The guaranteed policy cash value will begin to dwindle down to zero in the later years of the policy. For this reason it is strictly used for life insurance only.
Variable Universal Life
Variable Universal Life policies allow the insured to invest money in the market, rather than in bonds. If the insured is under the age of 40 and can afford the risk, this can be a great savings vehicle.
Whole Life policies are guaranteed and they build dividends over time. After a long growth period, these dividends can pay for the policies themselves. This can be a great way to balance out a portfolio of stocks, by adding some bond exposure.
Reasons to purchase Life Insurance
- Income Replacement When a family is trying to replace the main source of income for the family in the event of a death. To make sure the amount is adequate, please ask us for a worksheet. 95% percent of all individuals are under insured.
- College education for your children
- Debts owed mortgage and credit card debt
- Final expense costs