Permanent life insurance is an investment tool that builds cash value that you can borrow against or apply to future premiums. Whole life insurance is one type of permanent life insurance. It has fixed premiums and agreed-upon death benefits.
There are other kinds of permanent life insurance, though, that are more flexible: universal life and variable universal life are two of those. These are investment tools that allow policyholders to adjust both their premium payments and the policy’s death benefits. They also generate earnings based on the amount in the account. A variable policy is often tied to the stock market in some way, which can mean high upward potential but also the possibility of losses.
A permanent life insurance policy may be a great product for people with a lump sum or a steady flow of income they’d like to invest with less risk than simply buying stocks.
