Definitive Guide To Permanent Life Insurance And How It Works
Permanent life insurance is a type of life insurance that is meant to last until the insured is dead. It give financial protection to the next of kin of the insured when he/she is dead. Unlike term insurance which lasts for a given period of time and requires renewal if the policy coverage must continue, such is not the case with permanent life insurance coverage.
Permanent life insurance has just a few products, some new products that offer pure protection at more affordable rates and some with the option to accumulate cash value. if you’re curious about knowing the difference between term and permanent insurance, then check out this resource from Forbes about term and permanent life insurance, or better still, this 90 seconds video from Tim Maurer explains the whole thing for you.
In this article, we will discuss the two most popular ones, the permanent life insurance focused on pure protection and the other focused on cash value accumulation.
Guaranteed Universal Insurance
The guaranteed universal life insurance is also known as GUL, life time term, permanent term and no lapse guarantee universal life insurance. please watch the video below to understand the what GUI is all about.
Guaranteed universal life insurance is always referred as a lifetime term product because it has the simplicity of term life insurance policy with the benefit of having a permanent life insurance product. you can read up about GUI from jrc insurance group
Although GUI it’s more expensive than term life policy, it does provide the quality value of permanent coverage and that makes it the most affordable option for permanent life insurance on the market. Guaranteed universal insurance offers cash value but only in enough amount to guarantee a level premium throughout the length of the policy whether to age 100 or 121 depending on the company and policy type you are going with. The offer also provides a guaranteed death benefit amount provided you maintain the level premium throughout your policy. So the question now is,
Who Is Guaranteed Universal Life Insurance For?
Permanent term guaranteed universal life insurance policy is for anyone who has permanent financial responsibilities while Term life insurance is for anyone who has to cover short term financial responsibilities such as mortgages or college education. Unlike term policy, a guaranteed universal life policy is perfect for anyone who needs income replacement at any age whether business partner, spouse, friend or family that’s dependent on your own income. It can as well be used to leave any legacy behind for your loved ones and most importantly to cover any final expenses in the form of logistics, hospital bills, funeral expenses and any leftover liabilities when the insured is dead. So it’s good for cash value accumulation.
Options and Riders
One good thing about guaranteed universal life insurance policy is that it comes with many customizable options for you as a policy holder to choose from, some of the options may be unique to certain companies so it’s recommended you talk with your insurance agents to discuss all of the options best for you. Below are some of the customizable options of GUI.
- Option to convert
In option to convert, some Life Insurance companies will offer you the option to convert your GUL policy to a Universal Life insurance policy with cash value accumulation if your needs happen to change along the length of your policy. And it can be done without further underwriting provided it meets guidelines for conversion of the companies.
In brief GUL riders include:
Accelerated death benefit rider – If you are diagnosed to have less than 12 to 24 months to live, then you will eligible for up to 75% of your death benefit amount.
Accidental death benefit rider – here, the rider will increase the death benefit amount to be paid out if the death of the insured occurs as a result of accident.
Child term insurance rider – this is a rider that covers the financial implications of children up to 50,000 worth of coverage for each child up to 19 to 25 years of age depending on the insurance company.
Waiver of monthly deductions rider – This rider will help pay your monthly insurance premium for a certain period of time to prevent your policy from being disabled in case of inability to pay due to disability.
To learn more about this, you’re advised to speak with your agent about the best one to go with when getting insured.
you can as well read more about permanent insurance from Life Happens.
Now, over to you. You already know the permanent life insurance product that offers pure protection and the option to accumulate cash value.
Let us know what you think in the comment section.