Is Permanent Life Insurance a Bad Idea?

If you wish to:

Build tax-free wealth
Equalize an inheritance without selling a family farm or business
Leave a guaranteed inheritance to your loved ones
Provide long-term care for someone with special needs or a disability

then look into whole life insurance.

While less complex than other permanent products, whole life is still more difficult to quote online due to the explanations needed when looking at illustrations. If you’re interested in whole life insurance, complete the short form on our whole life page and an advisor will reach out and take some information to run personalized quotes for you.

The agent will also discuss your needs to make sure whole life insurance is the best option. Of course it’s ultimately up to you, but, like we mentioned earlier, term life insurance is often the best choice for families.

If you want lifelong coverage with flexible payments…

Universal life (UL) insurance is a similar product to whole life, but trades some of the cash value accumulation potential for more affordable flexible payment options. Once there’s enough cash value to keep the policy afloat, premium payments can be reduced or even stopped completely.

A policy owner should monitor a UL policy closely. If cash value runs out, the policy could terminate if you don’t pay out-of-pocket premiums. In addition, the price for a standard UL policy can increase as you age if the illustrated interest rates drop or the internal cost of insurance increases.

There are many variations of universal life insurance in the market. The products vary as to how customizable the death benefit, length of coverage, premium obligation, and cash value accumulation are.

If you want lifelong coverage and are willing to take some risks…

An indexed universal life (IUL) insurance policy functions similarly to a standard universal life policy, except that it accumulates value through investments in a stock market index rather than the typical low-risk investments that most dividend-paying policies use to grow.

The benefit of buying an IUL policy as opposed to simply investing in an index yourself is that there is a guaranteed 0% floor for your investment risk. If the stock market doesn’t perform well, your policy won’t lose value, it just won’t grow.

Like anything tied to the stock market, its growth isn’t something you can count on 100%. Because the price isn’t guaranteed, there is the possibility that a long streak of poor market activity could raise your premium and make your policy become unaffordable.

Contact Quotacy directly if you’re interested in learning more about IUL policies and to get cost estimates. An agent will get information from you to run personalized quotes and discuss your needs so you know you’re getting the best product for your unique situation.

As you’ve read, permanent life insurance can be quite beneficial in the right situation. Permanent life insurance isn’t inherently a bad product, it’s just not the best option for some people.

If you’re looking for simple income protection for your loved ones, term life insurance is by far the better choice. It’s affordable and can be customized to fit your budget and needs.

Getting term life insurance through Quotacy is simple. Run as many quotes as you’d like without divulging any contact information. When you’re ready to apply, your dedicated Quotacy agent will be your advocate to ensure you’re getting the best price possible and keep you updated as your application moves through the buying process. Once your coverage is inforce, Quotacy will be here for your future needs as well.

» Learn more: Is Term Life Insurance Better than Whole Life Insurance?