Can Permanent Life Insurance Expire?

Posted in Life Insurance , Permanent Insurance

August 24th, 2009

As the name implies, permanent life insurance is exactly that.Whether a person buys a permanent life insurance policy at age 0 or age 99, the policy will never expire. However, the policy can be canceled if premiums are not paid in a timely fashion, or if something is done to bar a benefits payout.

Those with large estates may especially benefit from opting into a permanent life insurance policy as aside from it never expiring, some other advantages are:

• Leveled premium payments for the entire payment due period
• The ability to save money on a tax-deferred basis
• A guaranteed death benefit
• The death benefit commonly does not have to pay federal income tax
• The cash value can be used as a a low-interest loan
• Permanent life insurance coverage that can never expire
• A chance to earn dividends on the investment
• Riders can customize the policy

There are some types of life insurance policies that have expiration dates built in, called term life policies. Term life insurance will provide a guaranteed death benefit paid out to the heirs. However, unlike permanent life insurance with no expiration date, a term life insurance policy will only be active for the period of time (or term) that you purchase it for. Many times, heads of household with young children and a spouse opt into a term life insurance policy in case of a premature death.

A permanent life insurance policy is not just enticing as a way to protect your family after you pass, the policy is also a way to diversify your investment portfolio. Over the course of the policy there is a chance to build cash value. Regardless of your physical condition or state of mental health, the permanent life insurance policy will never expire as long as you pay your bills.