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What is Permanent Life Insurance?

Permanent life insurance is a financial tool to protect you and your loved ones from an unexpected death by leveraging premium payments into a cash payout upon death.

This vehicle does more than pay out a death benefit for funeral expenses, permanent life insurance accrues cash value that can be used during your life, and the leveraged death benefit also avoids probate and passes to your heirs tax free (so long as a beneficiary is named). Before choosing the permanent life insurance policy that’s best for you, you will want to consider the following:

Consider what and who you are protecting

Permanent life insurance can protect assets transferring to heirs and can protect your heirs from debt obligations or taxes.

The importance of cash value

Different permanent life insurance policies offer different cash value benefits, allowing you to take loans or reduce your death benefit for cash payouts.

How much premium you are willing to pay

When deciding on levels of protection, there are significant differences in premium when comparing term vs. permanent life insurance, but permanent life insurance rates vary depending on your product.

The current outlook of your health

Insurance premiums will vary depending on your age and overall health. Factors might include smoking, drinking, weight, and lab work. This will impact your permanent insurance rates, so it’s always a good idea to compare several quotes.

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Policy Considerations

Once you’ve thought through the above points, it’s time to find the permanent life insurance policy that meets your needs. You will need to consider the risk you are willing to take – cash value growth will depend on two factors:

  • The quality of the insurance company your policy comes from
  • Whether it has risk exposure to the stock market
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Whole Life

This is the traditional permanent life insurance and accrues cash value through dividends, with the rates determined by the insurance company.

Universal Life

This type of policy invests premium payments in an index fund (like the S&P 500) or has a set minimum rate of return.


The right permanent life insurance policy can provide you and your loved ones with a variety of benefits:

Cash Value

Depending on the policy type you choose your cash value can accrue through company dividends or stock market growth. After a vestment period you, the insured, have access to your cash value through loans and death benefit reductions.

Death Benefit

This is the primary benefit that first comes to mind when people think of permanent life insurance. The death benefit pays out to your beneficiaries when a death certificate is presented to the insurance company – your beneficiaries then receive the death benefit from your policy and avoid probate and taxes.

Lifelong Protection

There are two guarantees in life: death and taxes, the only question is when? Permanent life insurance can protect your beneficiaries whenever that day comes.


Term vs Permanent Life Insurance

The primary difference between term and permanent life insurance is right in the name. A term policy can be outlived if you do not die within the term (usually 10, 15, or 20 years), whereas a permanent life insurance policy cannot be outlived as long as you maintain your premium payments (or cash value for UL insurance products).

Which one is right for me?

Term or Permanent Life Insurance

The answer to this will depend greatly on your circumstances. While a term life insurance policy tends to be most affordable, you may outlive a term life insurance policy (usually 10, 15, or 20 years). These plans provide beneficiaries with a lump sum payment, as long as you pass away within the designated time frame.

A permanent life insurance policy cannot be outlived, and offers up to lifelong coverage. Permanent life insurance also offers opportunity to build cash value on your plan, and helps in creating added inheritance. Also, permanent life insurance never needs to be renewed and rates can be locked in.

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Frequently Asked Questions

Answers to Frequently Asked Permanent Life Insurance Questions

What is Permanent Life Insurance?

Permanent life insurance leverages a premium payment to provide a death benefit payable to beneficiaries tax free and without having to go through probate no matter how long you live to. These vehicles also accrue cash value that can be accessed during your lifetime.

How does Permanent Life Insurance work?

Permanent life insurance works by leveraging your premium payments to a death benefit amount that would be larger than if you simply saved. This death benefit is then paid out, after a death certificate is presented to the insurance company, without going through probate and tax free.

Is Permanent Life Insurance worth it?

This depends on what you need your life insurance to do. Suitability for permanent life insurance can be determined with the help of an agent from Ansay & Associates.

How much is Permanent Life Insurance?

Permanent life insurance rates depend on a variety of factors: the strength of the insurance company, your overall health, and your age will play a factor in determining cost.

Is Permanent Life Insurance a good investment?

Again, life insurance can be an important piece in your financial picture, but what role that plays will largely depend on suitability to your financial goals and risk tolerance. Trusting the right advisor to lend a helping hand will ensure you get a unique permanent life insurance plan at a competitive rate.

Contact Us

We're here to answer your questions. Let's talk.

None of us know the day or the hour of our death, but you can always be prepared and ensure your loved ones are too. Contact Ansay & Associates today to get the best permanent life insurance quote on the market.

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