Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Feb 9, 2022

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The Brief

  • Permanent life insurance provides coverage for your entire life
  • Most permanent life insurance policies have life insurance coverage and a cash value account
  • Variable life insurance policies allow you to invest your cash value into various markets

Did you know you can use permanent life insurance as an investment in addition to life insurance coverage? Permanent life insurance has several perks you can take advantage of while ensuring the financial well-being of those closest to you.

But which permanent life insurance is best? And where can you buy permanent life insurance? Don’t worry, we’re here to answer all your questions about permanent insurance.

Our article breaks down all the details about permanent life insurance, different types of permanent life insurance, and sample life insurance rates.

Continue reading to learn more about permanent life insurance. Enter your ZIP code if you’re ready to compare multiple insurance companies in your area.

What is permanent life insurance?

Permanent life insurance provides life insurance coverage for your entire life. In addition to life insurance, you’ll have an account that accumulates cash.

So how does a permanent life insurance policy work?

Permanent life insurance is like any life insurance policy, it provides death benefits (policy amount) to beneficiaries after you pass away. As you pay life insurance rates per month, a portion of your life insurance payment goes into an accumulated cash value.

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How many types of permanent life insurance are there?

Multiple types of permanent life insurance policies are available at various companies across the United States. Each permanent life insurance is similar, but they have something unique.

Here’s a list of permanent life insurance policies you might see at different companies.

  • Whole life insurance
  • Guaranteed acceptance life insurance
  • Variable life insurance
  • Variable universal life insurance
  • Indexed universal life insurance

The best permanent life insurance companies provide several options for life-long coverage. But policies like variable life insurance work differently than whole life and universal life insurance.

How does whole life insurance work?

Whole life insurance is a standard life insurance policy with death benefits (policy amount) and an accumulated cash account (savings account). You’ll pay specific life insurance rates that contribute to life insurance coverage and the savings account.

What is guaranteed acceptance life insurance?

A guaranteed acceptance life insurance (GI life insurance) policy is a whole life insurance policy with no medical exam and no medical questions. In addition to skipping health checks, your policy amount is much lower than a standard whole life insurance policy.

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What is a variable life insurance policy?

Variable life insurance is like a whole life insurance policy, but the life insurance company allows you to use your savings account to invest in stocks and bond mutual funds. As the policyholder, you’ll be responsible for gains and losses on your investments.

How are universal life insurance policies different?

Universal life insurance policies provide life insurance coverage and a savings account like most permanent life insurance plans.

But universal life insurance policies allow you to adjust your monthly rates by using your accumulated cash. However, you must have enough saved up in your life insurance account to influence your universal life insurance policy.

Variable universal life (VUL) insurance combines the perks of variable and universal life insurance. Meanwhile, indexed universal life (IUL) allows the life insurance company to choose investments for you, and it provides the same perks as a universal life insurance policy.

What’s the difference between permanent life insurance and term life insurance?

Permanent life insurance lasts your entire life, but term life insurance lasts for a few years. Your term insurance length depends on which policy type you’ve chosen. Most life insurance companies provide term lengths from five years to 30 years.

The higher the term length, the more you’ll pay for life insurance per month. Also, term life insurance doesn’t provide investments or savings accounts.

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Can you borrow from life insurance?

Yes, you can. One of the best benefits of permanent life insurance is borrowing against your death benefits or accumulated cash value account. Using your life insurance savings to get a loan or supplement an investment is a strategy known as infinite banking.

If you pay back your loan before you pass away, your policy amount won’t be affected. Failing to pay back into your death benefits could affect the life insurance payout to beneficiaries after you pass away.

A surrender cash value is the amount of money you receive after the life insurance company subtracts fees from your accumulated cash value.

However, you can borrow from your accumulated cash value or make a withdrawal from your life insurance account. If you take out the total amount, you won’t get the entire balance of your accumulated cash value. You’ll receive the surrender cash value from the life insurance company.

Are permanent life insurance earnings taxable income?

It depends. According to the Internal Revenue Service (IRS), the death benefits you receive from a life insurance payout aren’t part of your gross income. But any interest you get from a life insurance policy may be considered taxable income.

For example, the cash surrender value (also called surrender cash value) or earnings from investment could be taxed by the IRS. Be sure to see a tax professional about sticky situations where earned interest affects a policy amount.

How much are permanent life insurance rates?

Permanent life insurance quotes are based on your age, health, gender, policy type, add-ons (riders), and the policy amount.

Average Monthly Term vs. Whole Life Insurance Rates
Policyholder Age & Tobacco UseAverage Monthly Term Rates: MaleAverage Monthly Term Rates: FemaleAverage Monthly Whole Rates: MaleAverage Monthly Whole Rates: Female
25-Year-Old Non-Smoker$15$13$94$85
35-Year-Old Non-Smoker$15$14$128$113
45-Year-Old Non-Smoker$22$20$191$243
55-Year-Old Non-Smoker$44$34$295$422
65-Year-Old Non-Smoker$106$73$528$204
Average Annual Rates for Non-Smokers$40$186$247$204
25-Year-Old Smoker$27$21$116$107
35-Year-Old Smoker$30$24$157$146
45-Year-Old Smoker$53$41$224$206
55-Year-Old Smoker$114$83$350$321
65-Year-Old Smoker$270$186$600$204
Average Annual Rates for Smokers$99$71$289$253
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We compared term vs. permanent life insurance and found that term life insurance is much cheaper. Whole life insurance cost is more expensive, but it provides more.

Younger people are likely to get affordable permanent life insurance, but seniors pay more expensive rates. However, there’s a way to get a deal on life insurance if you shop with the right company.

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What are the best permanent life insurance companies?

Before you buy permanent life insurance, you should know about the best life insurance companies in the United States. Let’s examine America’s top life insurance companies based on market share and yearly earnings.

Top 20 Whole Life Insurance Companies by Market Share
CompaniesDirect Written PremiumMarket Share
Northwestern Mutual$10,517,115,4526.42%
Metropolitan Group$9,821,445,9536.00%
New York Life$9,925,848,3005.68%
Prudential$9,128,805,0605.57%
Lincoln National$8,769,303,7745.36%
MassMutual$6,854,713,0574.19%
Aegon$4,809,856,6502.94%
John Hancock$4,640,905,0172.83%
State Farm$4,633,004,9632.83%
Minnesota Mutual Group$4,422,100,0282.70%
Guardian Life$4,033,541,4012.46%
Pacific Life$3,755,606,2132.29%
Nationwide$3,364,808,1812.05%
AIG$3,336,397,4532.04%
AXA Equitable$3,051,945,8491.86%
Voya Financial$2,526,828,2681.54%
Brighthouse Financial$2,519,733,1161.54%
Protective Life$2,403,640,8251.47%
Primerica$2,375,786,1901.45%
Sammons Enterprises$2,321,529,7221.42%
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Although we couldn’t locate the best companies for each specific permanent life insurance type, we did find the top 20 life insurance companies that provide whole life insurance. You’ll also notice that some of these companies are connected to home and auto insurance.

You could save money if you bundle your life insurance with your current insurance company. If you can get a better deal on life insurance elsewhere, you should shop with another insurance company.

Permanent Life Insurance: What are the advantages and disadvantages?

Permanent life insurance has several perks, but you may feel the sting of some pitfalls of permanent life insurance in some situations.

Let’s look at the pros and cons of permanent life insurance:

Pros

  • You can save money while getting life insurance coverage
  • You’re able to borrow from your savings account
  • Life insurance riders can expand coverage
  • Investment opportunities
  • Life-long life insurance policy

Cons

  • More expensive than term life insurance
  • Borrowing money from your policy could affect your death benefits
  • Regular health checks to determine life insurance eligibility
  • You may lose money through investments under IUL and VUL insurance

The advantages and disadvantages are almost balanced. We recommend permanent life insurance for people who have a flexible budget, especially if you’re looking to invest in something long-term. Maintaining good health is a sure way to keep your rates low, and it maximizes your benefits.

Permanent Life Insurance: The Bottom Line

Permanent life insurance is rewarding if you keep it for a long time. The accumulated cash value builds interest over time, and you can use it while you’re still alive.

Borrowing against your policy amount or savings account gives you financial options in tight situations. However, permanent life insurance is more expensive. Therefore, expect permanent life insurance costs to get more expensive as you get older.

But there’s a way to secure affordable permanent life insurance. Now that you know more about permanent life insurance policies, use our free online quote tool below to compare multiple insurance companies near you.