Permanent Life Insurance
“Why would I need permanent insurance? I’ll eventually pay off my mortgage and my kids will become independent.” Temporary insurance needs can certainly be covered well with Term Insurance but as one moves through the stages of life their perspectives and needs will change. Permanent Life insurance is one of the most versatile financial planning tools available. It can be structured in any number of ways to suit these changing needs and utilized not only in the event of death, but during your lifetime.
There are two types of permanent life insurance: Whole Life & Universal Life. Both products work off the concept of having a base amount of insurance with a level cost for life. Deposits made into the policy over the basic amount are placed into an investment account. The investment account and the death benefit have the capacity to grow on a tax free basis. Where the two types differ is how the investment portion is handled.
The only way to evaluate whether permanent life insurance is needed is to model out your system to see what the possible issues may be in the future stages of life.