Today we dive into permanent life insurance and what consumers should be aware of before purchasing.
Permanent life insurance is one of the most misunderstood (and oversold in my opinion) insurance products. There are some reasons that you may want permanent life insurance, but term life insurance may be the better option.
This podcast episode may be especially helpful if any of the topics below apply to you.
Will You Have to Pay Estate Taxes?
If your net worth is above $11.7 Million (single) or $23.4 Million (Joint), then this may apply. This threshold may change over time, but that’s where it is for 2021. Life insurance may be able to provide for the payment of estate taxes. If structured properly, you can pass money outside your estate to your heirs. I’ll also talk about an ILIT (Irrevocable Life Insurance Trust). Regardless, taxes are always an important topic to discuss.
Different Types of Permanent Life Insurance
I’ll talk about Universal Life Insurance, Variable Universal Life Insurance, Guaranteed Universal Life Insurance, and Whole Life Insurance. There are some important differences between these different types of insurance. I’ll also talk about some features like Accumulated Interest and Extended Term Life Insurance.
Changing Life Insurance Policies
I’ll talk about options you can take if you have a life insurance policy that you no longer need. There are several options that are covered in this episode. These include surrender of your life insurance policy, reduced paid-up policy options, and extended term.
Additional Thoughts and Ideas
There are other things to look at such as 1035 exchanges, and possibly selling your policy. There are some situations in which permanent life insurance is a good option. Term insurance is a good option for most people. I’ll talk about why changes in laws might mean you need to take a closer look at your life insurance you do or don’t have.