Permanent Life Insurance
At SG Wealth Management, we help you secure your financial future with permanent life insurance—coverage that lasts a lifetime. Unlike term insurance, it doesn’t expire and builds cash value over time, making it a powerful asset in your long-term financial plan.
What is Permanent Life Insurance?
Permanent life insurance is a type of life insurance that provides coverage for your entire life. It offers a guaranteed death benefit to your beneficiaries upon your passing, provided premiums are maintained. A key feature of many permanent life insurance policies is the accumulation of 'cash value' over time. This cash value can grow on a tax-deferred basis and can be accessed during your lifetime through policy loans or withdrawals, offering a flexible financial resource.
Key Features and Benefits of Permanent Life Insurance
1.
Lifelong Coverage
Enjoy peace of mind knowing your coverage will never expire, providing a guaranteed death benefit for your loved ones whenever you pass away.
2.
Cash Value Accumulation
Many permanent policies build cash value over time, which grows on a tax-deferred basis. This cash value can be a valuable financial resource, accessible through policy loans or withdrawals for various needs, such as supplementing retirement income, funding education, or covering unexpected expenses.
3.
Stable Premiums
In most cases, premiums for permanent life insurance are fixed and guaranteed not to increase over the life of the policy, making financial planning predictable.
4.
Tax-Free Death Benefit
The death benefit paid to your beneficiaries is generally tax-free, providing them with the full amount to use as they see fit, whether for covering final expenses, paying off debts, or maintaining their lifestyle.
5.
Estate Planning Tool
Permanent life insurance can be an effective tool for estate planning, helping to preserve wealth, equalize inheritances, or cover potential estate taxes.
Types of Permanent Life Insurance
Compare the key features of different permanent life insurance options to find the right fit for your financial goals.
| Feature | Whole Life Insurance | Universal Life Insurance | Participating Life Insurance |
|---|---|---|---|
| Coverage | Lifelong, guaranteed | Lifelong, flexible | Lifelong, guaranteed |
| Premiums | Fixed and guaranteed | Flexible, can be adjusted | Fixed, can be reduced by dividends |
| Cash Value | Guaranteed growth, accessible | Growth tied to investments, accessible | Growth through dividends, accessible |
| Control | Less control over investments | More control over investment choices | Less control, but participates in company profits |
| Complexity | Simpler, predictable | More complex, requires active management | Moderate complexity, benefits from company performance |
| Potential Growth | Steady, guaranteed | Higher potential growth (with risk) | Potential for higher growth through dividends |
| Ideal For | Those seeking predictability and guaranteed growth | Those seeking flexibility and investment control | Those seeking guaranteed growth with dividend potential |
Frequently Asked Questions (FAQs)
The primary difference lies in the duration of coverage. Term life insurance provides coverage for a specific period (e.g., 10, 20, or 30 years) and pays a death benefit only if the insured dies within that term. Permanent life insurance, on the other hand, provides lifelong coverage and typically includes a cash value component that grows over time.
Yes, you can access the cash value through policy loans or withdrawals. Policy loans accrue interest and reduce the death benefit if not repaid. Withdrawals also reduce the death benefit and may be subject to taxes if the amount withdrawn exceeds the premiums paid.
For most types of permanent life insurance, such as whole life, the premiums are fixed and guaranteed not to increase. For universal life insurance, there can be more flexibility in premium payments, allowing you to adjust them within certain limits.
In Canada, the death benefit paid to beneficiaries from a permanent life insurance policy is generally received tax-free.
Permanent life insurance is suitable for individuals who want lifelong coverage, wish to build tax-deferred cash value, and are looking for a tool for estate planning or wealth transfer. It's often considered once short-term financial obligations are met and long-term financial security becomes a priority.
Ready to Secure Your Future with PERMANENT Life Insurance?
At SG Wealth Management, we are committed to helping you find the right life insurance solution that fits your unique circumstances. schedule a meeting with Sim Gakhar today!