Over 30 Reasons to Consider Permanent Life Insurance

Life insurance is often viewed as a safety net for loved ones, but the benefits of permanent life insurance extend far beyond just a death benefit. Unlike term life insurance, which provides coverage for a specific period, permanent life insurance lasts a lifetime, offering various financial and personal advantages. Here are 31 compelling reasons to consider adding permanent life insurance to your financial plan:

1. Lifetime Coverage

Permanent life insurance provides coverage for your entire life, ensuring your beneficiaries receive a payout no matter when you pass away.

2. Guaranteed Death Benefit

The death benefit is guaranteed as long as the policy is in force, providing peace of mind that your loved ones will be financially protected.

3. Cash Value Accumulation/ Lifetime Income Rider

A portion of your premium goes into a cash value account that grows over time and can be accessed for various financial needs. Or you can take an income out for your lifetime and still have a small amount left for your final expenses.

4. Tax-Deferred Growth

The cash value grows on a tax-deferred basis, meaning you won’t pay taxes on the growth until you withdraw the money.

5. Tax-Free Death Benefit

The death benefit is typically paid out to your beneficiaries tax-free, allowing them to receive the full amount.

6. Loan Options

You can borrow against your policy's cash value, often at lower interest rates than traditional loans. The loan doesn’t have to be repaid during your lifetime.

7. Living Benefits* - There is no additional premium for these benefits.

Terminal Illness – allows for the payment of a portion of an insured’s death benefit, on a discounted basis, if the insured has an illness or chronic condition that can reasonably be expected to result in death in 24 months or less.

Critical Illness - Allow for the payment of a portion of an insured’s death benefit, on a discounted basis, if the insured is Covers: Diagnosis of ALS (Lou Gehrig’s Disease) • Aorta Graft Surgery • Aplastic Anemia • Blindness • Cancer • Cystic Fibrosis • End-Stage Renal Failure • Heart Attack • Heart Valve Replacement • Major Organ Transplant • Motor Neuron Disease • Stroke • Sudden Cardiac Arrest

Chronic Illness - allow for the payment of a portion of an insured’s death benefit, on a discounted basis, if the insured is chronically ill. A chronic illness is defined as one that leaves you unable to perform, without substantial assistance, two of the six normal activities of daily living for a period of at least 90 days due to a loss of functional capacity or requires substantial supervision to protect oneself from threats to health and safety due to severe cognitive impairment. The six activities of daily living include bathing, continence, dressing, eating, toileting, and transferring.

Critical Injury - Allow for the payment of a portion of an insured’s death benefit, on a discounted basis, if the insured is Covers: Coma • Paralysis • Severe Burns • Traumatic Brain Injury

Alzheimer’s Disease Rider- Allows for payment of a portion of an insured’s death benefit, on a discounted basis, if the insured has a qualifying diagnosis of Alzheimer’s disease or Lewy Body Dementia.

*These benefits may vary by state and carrier. Please refer to your policy for specific details about these riders.

8. Protection Against Market Fluctuations

Unlike investments tied to the stock market, permanent life insurance provides stable growth without the risk of market downturns.

9. Estate Planning Tool

Permanent life insurance can be a valuable part of estate planning. It can help to cover estate taxes and ensure that your heirs receive their inheritance without financial burden.

10. Supplemental Retirement Income

The cash value can be used as a source of supplemental income during retirement, providing financial flexibility.

11. Legacy Creation

Permanent life insurance allows you to create a financial legacy for your loved ones or favorite charities.

12. Don’t Leave Money, Spend Your Money & Leave Insurance

Instead of holding back on spending to leave money for your heirs, you can spend your money freely, knowing that the life insurance policy will provide a substantial death benefit to your loved ones when you pass. This allows you to maximize your enjoyment of your hard-earned wealth while still ensuring your family is financially protected.

13. Maximize Charitable Giving

You can designate a charity as a beneficiary, ensuring that your philanthropic efforts continue after you’re gone.

14. Creditor Protection

In some states, life insurance policies' cash value and death benefit are protected from creditors, safeguarding your assets.

15. Access to Liquidity/Rain Day Fund/Mattress Money/Emergency Money

The cash value of a permanent life insurance policy provides liquidity that can be accessed in times of need without selling other investments.

16. Business Planning

Permanent life insurance can fund buy-sell agreements, key person insurance, or provide collateral for business loans, making it a valuable tool for business owners.

17. Exchanging Pennies for Dollars

Permanent life insurance allows you to "exchange pennies for dollars" by turning relatively small premium payments into a substantial death benefit for your beneficiaries. Over time, the cumulative premiums you pay are far outweighed by the guaranteed death benefit your loved ones receive, making it a cost-effective way to leave a significant financial legacy.

18. Financial Security for Dependents

Permanent life insurance ensures that your dependents, such as children or a spouse, have financial security in your absence.

19. Estate Equalization

Life insurance can be used to equalize an inheritance among heirs, particularly when other assets, like a family business or real estate, are involved.

Example of Estate Equalization:

Imagine a family where a parent owns a successful family business and two pieces of valuable real estate. The parent has three children: Child A, Child B, and Child C.

Child A is actively involved in the family business and is expected to take over the operations.

Child B is interested in one of the properties they plan to live in or use for investment.

Child C is not particularly attached to the business or the properties but wants to receive a fair inheritance.

To ensure fairness:

The Business: The parent decides to leave the family business to

Child A. The business is valued at $1 million.

Real Estate: The parent leaves the real estate that Child B is interested in. The real estate is valued at $1 million.

Now, to equalize the inheritance:

Life Insurance for Child C: The parent purchases a permanent life insurance policy with a death benefit of $1 million, naming Child C as the beneficiary.

In this scenario:

Child A receives the family business valued at $1 million.

Child B receives real estate valued at $1 million.

Child C receives $1 million from the life insurance policy.

Each child receives a fair and equitable portion of the estate, allowing parents to pass on their assets according to their children's interests and needs without forcing the sale of the business or real estate.

This strategy helps prevent conflicts and ensures that each heir feels valued and treated fairly, even when the estate assets themselves may not be evenly divisible.

20. Flexible Payment Options

Some permanent life insurance policies offer flexible premium payment options, allowing you to adjust your payments based on your financial situation.

21. Protection Against Inflation

Certain policies offer riders that increase the death benefit over time, helping to protect against inflation and ensure your policy’s value keeps pace with the cost of living.

22. Peace of Mind

Knowing that you have a financial plan in place that will last a lifetime provides peace of mind for you and your loved ones.

23. Investment Diversification/Asset Class

Permanent life insurance can be a stable and conservative component of your overall investment portfolio, offering diversification beyond stocks and bonds.

24. Financial Discipline

The structure of permanent life insurance encourages regular contributions, promoting financial discipline and long-term savings habits.

25. Mortgage and Debt Cancellation

Life insurance ensures that in the event of the policyholder’s death, the outstanding mortgage or other debts are paid off using the death benefit. This relieves the surviving family members from the financial burden of these obligations, allowing them to keep their home and maintain financial stability without worrying about ongoing payments.

26. College Funding

Permanent life insurance can help fund a child's college education. The policy’s cash value grows over time, and you can access these funds to pay for tuition, books, or other college expenses. This strategy provides a reliable source of education funding, ensuring that your child’s future is financially supported.

27. Special Needs Protection, Trust

Permanent life insurance can fund a special needs trust, ensuring lifelong care and financial security for a dependent with special needs. The trust receives the death benefit, which can be used to cover medical expenses, living costs, and other necessities without affecting the dependent's eligibility for government benefits.

Trust:

Using permanent life insurance within a trust allows the death benefit to be managed according to your specific wishes. The trust can distribute funds to beneficiaries over time, protecting the assets from creditors and ensuring that they are used in a manner consistent with your estate plan.

28. Only Financial Vehicle that is Self-Completing

This flexibility makes permanent life insurance a versatile financial tool for both protection and financial planning during your life.

29. Marriage & Divorce

Permanent life insurance can play a crucial role in both marriage and divorce. In marriage, it provides financial security for your spouse, ensuring they are taken care of in the event of your untimely death. In divorce, it can be used to secure alimony or child support obligations, protecting the financial well-being of your children and ex-spouse. The cash value can also serve as an asset during the property division, offering flexibility and fairness in financial settlements.

30. Building A Secure Financial Plan

Check out this short video clip of the Bucket Strategy.

31. LOVE

With love, permanent life insurance is like a warm, reassuring hug that keeps giving, even when you're not there to offer it yourself. It ensures that your loved ones are cared for and that your legacy is preserved, giving you the comfort of knowing that you’ve made a thoughtful and enduring choice for their well-being.

Conclusion

Permanent life insurance is more than just a death benefit; it’s a versatile financial tool that can offer a range of benefits throughout your life. Whether you’re looking to protect your loved ones, supplement your retirement income, or plan your estate, permanent life insurance provides the flexibility and security to meet your financial goals. Consider how these 31 reasons align with your needs. See Danny Favreau to see how permanent life insurance can fit into your overall financial plan by booking an appointment today.

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