Permanent life insurance is a type of insurance policy that provides coverage for the entire life. Term insurance provides coverage for a specific term but permanent life insurance is for the whole life of the insured person. This insurance policy is intended for long-term needs and the premium of permanent life insurance is more than term insurance premiums.

The policy never expires and the face value of the policy is paid upon the death of the insured.

Permanent life insurance provides death benefits as well as a saving accounts (cash value). The account is created with portions of the premium paid. The cash value builds up slowly in time as more money comes in. The cash value can be used by the policy holder to borrow funds and can also be withdrawn in need. It can also be used to pay premiums. The premium for permanent life insurance is generally high as compared to term life insurance due to fees, charges and because some of the premium amount is put into savings account.

Types of permanent life insurance:

• Whole life insurance: This type of insurance policy provides coverage for entire lifetime and also provides certain added advantages such as death benefits and dividends (excess premium is paid back).
• Universal life insurance: This insurance policy is more flexible and allows to adjust the insurance amount according to the needs. The policy owner can also withdraw from cash value.
• Variable life insurance: This policy offers various investment options and the cash value can be invested in stocks, bonds and mutual funds to earn high returns.
• Variable universal life insurance: It is a combination of universal and variable life insurance policies.

Based on how long one plans to keep a policy and if he/she is looking for long term financial support, one can purchase permanent life insurance policy.