Permanent life insurance policies offer:
* Fixed or flexible premiums
* Guaranteed or non-guaranteed cash values.
* Cash value accumulates as a result of the premium and investment performances.
* Some permanent policies offer policy dividends.

They are four types of permanent insurance policies:

Whole Life insurance Policy (aka traditional) : provides a lifetime protection for as long as the premiums are paid.

The policy owner agrees to pay level premium amount generally to age 100. In return, the insurance company agrees to pay the beneficiary a death benefit amount when the insured prematurely dies.
Policy owners, who wish to terminate their policies earlier, are entitled to scheduled cash surrendered value.

Variable Whole life insurance policy: Is a whole life insurance policy whereby the policy owner dictates where the funds in the cash-value are to be invested among several separate accounts.

The policy owner bears all the investment risk associated with the performance of the separate account performance.

Death benefits may increase or decrease, but not below the guaranteed minimum amount.

Universal Life Insurance Policy UL (aka Flexible Premium): Is a permanent policy that allows the owner the flexibility to adjust the premium payments. Premium payments can be made from month to month within limits. The premiums and can even be skipped for as long as the cash-value is sufficient to cover the policy monthly charge.

If premium payments have been skipped too many times, the policy may be in danger of lapsing.

Most universal life insurance policies offer two types of death benefit options

Option A: Fixed (level) death benefit option stays in level for the term of the contract.
Option B: Is equal to the specified level of pure insurance plus the policies cash value at time of death, thus, the death benefit increases as a cash-value increases as well.

Variable universal life insurance policy VUL: Is a universal life insurance policy whereby the policy owner dictates where the fund in the cash-value is to be invested among several separate accounts.

Under Option B, the death benefit will vary directly with the change in cash-value.

Since variable life and variable universal life are considered securities, owners must be given a prospectus .

When proposing VL or VUL, a suitability analysis report must be completed to make sure that the policy owner has a basic understanding of investment and is capable of making good investment decisions .

Contrary to universal life and whole life policies, with variable life and variable universal life, the policy owner must be willing to bear the entire risk of investment since the cash-value is not guaranteed.

Advantages of Permanent Life Insurance

Protection for as long as the premiums are paid

Premiums can be fixed or flexible to meet the premium payer financial wishes

Policy accumulates cash value that in-turn can be borrowed against

Policy can be surrendered in part or in total, so that the cash value can provide income at retirement

Disadvantages of Permanent Life Insurance

If not kept the long enough, permanent life insurance can be more expensive than term life insurance

Cost of premiums may make it harder financially to purchase additional insurance.

Surrendering the policy within the first 5-10 years, may result in great lost on the part of the policy owner.