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The Pros and Cons of Permanent Life Insurance Policies


Permanent life insurance policies cover the holder's whole life; it is also called whole life insurance. Choosing insurance for your retirement is a way to ensure that you will have a secured future. In deciding if this is the insurance you want to own, it is important to know the pros and cons.


One of the great advantages of the permanent life insurance is the accrual of cash value. It's like getting interest in a bank, but you get higher returns. In permanent life insurance, as the name suggests, it is permanent; you have the assurance of coverage for life and when you surrender the insurance, you get full refund with accrued cash. Since this is a whole life insurance, your premiums are fixed and you will not need to worry about rising premium rates. When the time comes that you will withdraw funds from your insurance, they will be tax free.


The policy holder does not have control over investments. The money you invested in the insurance will go to the stocks, bonds and mutual funds that the insurance company has sole rights to. Premiums of permanent life insurance are also more expensive than term life insurance and may not be attractive to budget conscious families. These premiums have to be paid for a long period of time and could even run up to a lifetime, not taking into consideration the financial and economic changes in a household.  Not like withdrawing from a bank which is easy, withdrawing from this insurance is a much more complicated and time-consuming process.

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