Permanent Insurance: An Overview Print
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Sections - Insurance, Securities and Taxation
Tuesday, 03 June 2008 15:37

As the name implies, permanent (cash value) insurance is best suited for the individual with a long-term (often indefinite) need. A permanent policy is really a combination of "pure insurance" and an asset-accumulation element. Premiums are considerably higher than term rates in the beginning years, but may drop significantly, or even disappear, in later years. Other differences may include an increasing death benefit, a "cash value" associated with the policy, and tax-advantaged borrowing privileges against your cash value.


Whole Life -- This type of coverage covers you for as long as you live, as long as you make premium payments. Usually, this type of policy has a level premium for the life of the policy. Initial premiums are generally high compared with term insurance premiums, but eventually they become lower than the premiums you would pay if you had kept renewing a term policy. Over time, a whole life policy builds cash value at a rate of interest set by the issuing insurance company.


SRN Financial Services, Inc. in Torrance, CA 90502 provides a wide range of insurance products for individual and small groups. It serves  the Southbay area that includes Carson, Long Beach, Torrance, Lomita, Gardena, Rancho Palos Verdes, Harbor City, Long Beach, El Segundo, Hawthorne, Inglewood and all of Los Angeles county. Our services include individual and group life, health, long-term care, disability, and travel health insurance, annuities, key-employee insurance, buy-sell agreements, estate planning, retirement planning, business insurance, Medicare supplement, home insurance, cheap car insurance, dental insurance, travel insurance, online-insurance quotes, medical insurance, term life insurance, traveler insurance. Other services include Income Tax preparation, Home Loans and notary services.  Call to schedule an appointment at (310) 530-4692.

Editor's Note: Readers may view also this article and other data about insurance at the SRN Financial Services' website at


Universal Life -- With universal life coverage, which also covers you for as long as you live, you can vary your premium payments and the face amount of your coverage. Most of your premium payment goes into an account, which earns interest. You may borrow against the cash value, but eventually, if the balance continues to drop, your coverage will end. To prevent that, you would have to start making premium payments again, increase your premium payments, or lower your death benefits. Generally, your policy will state that it will pay the premiums from the cash value of your policy. Variable universal life also falls into this category; the difference is that a portion of your premium in "invested" in sub-accounts that resemble mutual funds and can own stocks, bonds, cash, or some combination thereof.

Variable Life - This type of policy gives you an element of control over the cash value portion of your policy. Variable life allows you to allocate your cash value among a variety of investment sub-accounts. Although the premiums you pay are fixed throughout the life of the contract, the performance of your chosen sub-accounts determines the growth of your cash value and also can determine the value of your death benefit. No matter how your sub-accounts perform, the death benefit of your variable life policy is guaranteed. Although contracts may vary, your premiums generally won't change. And as long as you pay your fixed premiums, your death benefit cannot go away. This is not the case with universal or variable universal life insurance. Please note guarantee is subject to the claims paying ability of the insurer.

Of course, your insurance needs will be determined by your individual situation. And keep in mind, the cost and availability of the type of life insurance that's right for you depend on factors such as your age, health, and the type and amount of insurance you need. If you are considering purchasing life insurance, we recommending consulting us to explore all your options and determine the solution that best fits your unique needs. # # #


Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice. Source: Financial Visions, Inc., as provided by

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Last Updated on Tuesday, 03 June 2008 15:59
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