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Eternal life insurance policy is a type of permanent insurance that pays to cover a person’s lifetime costs. That way, if the insured person dies at some point in the future, they will continue receiving payments until that person dies. In other words, eternal life insurance provides a payout for as long as you are alive. Eternal life insurance can also be known as permanent life insurance or whole life insurance.
The main difference between the two types of policies is how much coverage you get for your premiums. With traditional permanent life coverage, you usually receive no more than $100,000 in coverage per beneficiary. On the other end of the spectrum, with some providers offering super-life insurance plans that offer up to hundreds of millions in coverage per beneficiary.
What is Eternal Life Insurance?
Eternal life insurance is a type of insurance that pays a person a monthly death benefit as long as that person keeps the policy in force. This is why eternal life insurance is also referred to as permanent life insurance. As the name suggests, these policies provide you with a lifetime of protection.
So, if you die, the insurance company will continue to pay you a monthly death benefit until the person you leave behind dies as well, or until the death benefit runs out. In fact, the only way for an eternal life insurance policy to end is if the insured person dies. This means that it is possible to receive monthly death benefits even if you are not alive anymore.
Types of Eternal Life Insurance
Traditional permanent life insurance: This is the most common type of permanent insurance. It covers the death of one person with a maximum death benefit of $100,000 per person. Estate insurance: This is another type of permanent insurance that pays out money to cover the expenses of your estate, like funeral expenses and taxes. Unlike traditional permanent life insurance, it doesn’t cover the death of the person who bought the policy but of the person who will be receiving the funds.
Benefits of Having Eternal Life Insurance
- Protection from Poverty: If you die, the insurance company will continue to pay your beneficiaries a monthly death benefit until they, too, die. This way, if you have children who grow old and get sick, they are not left in economic distress.
- Protection from Medical Expenses: If you have chronic medical conditions like diabetes, high blood pressure, or a condition that requires frequent surgeries, you may be able to get life insurance to cover the medical expenses of your family.
- Protection from Creditors: If you have a high-interest debt like a mortgage or credit card, you can get life insurance to pay off the debt and protect your loved ones from being harassed by creditors.
- Protection from Inheritance Taxes: Inheritance taxes are assessed when one person dies and another person inherits money. If you die with a traditional permanent life insurance policy, your beneficiaries won’t have to pay this tax.
How to Buy Eternal Life Insurance
There are a number of ways to get life insurance, but the most popular method of purchasing a policy is through an insurance agent. Other ways to get life insurance include through a mutual fund, life insurance policy purchased from a company that administers your 401(k) or other retirement plan, or an accident or health insurance policy issued by an employer.
How is Eternal Life Insurance Different From Regular Permanent Life Insurance?
Like traditional permanent life insurance, eternal life insurance protects against the death of the person who takes out the policy. But there are two key differences between these two types of policies.
- Sale Duration: With traditional permanent life coverage, the policyholder takes out an insurance policy for a specific amount of time, like 10 years. This means that the person will be covered for ten years only, and then they are no longer protected.
- Death Benefit: The death benefit offered by eternal life insurance is usually higher than that of traditional permanent life insurance. This is because with eternal life insurance, the death benefit will continue to be paid out even after the person who took out the policy dies.
Pros of Eternal Life Insurance
- Protection from Poverty: The death benefit offered by life insurance is often used to provide for the living expenses of the family members if the person who took out the policy dies. The death benefit is usually paid out for, at the most, 10 years.
- Protection from Medical Expenses: Life insurance is a good way to protect family members from medical expenses if they get sick and require expensive treatments.
- Protection from Creditors: If you have a high-interest debt like a mortgage or credit card, life insurance can be used to pay off the debt and protect your loved ones from being harassed by creditors.
- Inheritance Taxes: Inheritance taxes are assessed when one person dies and another person inherits money. If you die with a traditional permanent life insurance policy, your beneficiaries won’t have to pay this tax.
Final Words: Should you buy eternal life insurance?
As you can see, there are many advantages of buying an eternal life insurance policy. Even though it is more expensive compared to regular permanent life insurance, it will provide you with protection from poverty, medical expenses, and even creditors in case you have high-interest debts. There are, however, some things you should keep in mind before you buy one of these policies.
- First, you should make sure that the benefits offered by the insurance company are worth the higher premium.
- Secondly, you should consider the terms and conditions of the policy, including the death benefit and the minimum amount of coverage you will receive.
- Last but not least, you should determine if buying eternal life insurance is right for you based on your financial situation.