As I mentioned in Part 1 of this subject, while term life insurance is a great option for many people and purposes, there are situations for which permanent life insurance might make more sense.  To continue the list:

• To Provide Liquidity to Pay Estate Taxes:  This is one of the reasons we see most frequently.  People with large estates may be subject to estate taxes at death.  Life insurance owned by an Irrevocable Life Insurance Trust (ILIT) can escape estate taxation and provide the liquidity needed to pay those taxes.
• To Provide for Business Continuation:  Permanent life insurance can be a better solutions than term life insurance for funding a business continuation plan.  It insures the policy will be in force regardless of how long the business owner stays active in the business.
• To Maximize a Pension:  A retiree may elect to take the highest (life) payout option on his/her pension, while still protecting the surviving spouse.  Permanent life insurance is a great way to accomplish this.
• To Provide Creditor Protection:  Some states protect policy cash values from the claims of creditors.
• To Provide for Executive Benefits:  If structured properly, policy cash values can be used to fund deferred compensation retirement benefits paid to executives.  Death benefits can be used as cost recovery mechanisms for the company.

We will continue this list in our next post.  In the meantime, feel free to look at permanent life insurance quotes or term life insurance quotes.

There are 2 types of life insurance, permanent life insurance and term life insurance. Much time is spent discussing term life now let us take a few minutes to talk about permanent life.

• What Is Permanent Life Insurance?

A permanent policy is one which you can keep for as long as you want to keep it even if it is for the rest of your life…even up until age 100. Permanent policies usually have a cash value that you can fall back on in the future if you need to.

Some permanent life policies pay a dividend in addition to the cash value if the company with which you have your policy does a good job with their investments and are good at keeping their expenses down.

There are many different types of permanent policies.

Read more…