Why buy life insurance policies?
Generally, life insurance policies provide protection for the surviving family members. I say generally, because there are times when a company may purchase life insurance to cover one of their key employees whose death would cause severe financial strain on the company. Or a credit card company may offer life insurance to the card holder that will pay off the outstanding balance. There are two types of life polices, permanent and term: • Permanent Insurance Policies: Permanent policies cost more and are more complicated than term policies. As the name suggest, permanent remain in effect for the lifetime of the policyholder (unless the insured defaults on premium payments). In addition to death benefits, permanent policies provide investment opportunities. The value of these policies increases over time and may be borrowed against. Similar to buying a house. The value of the house increases over time and you may borrow against the equity. Tax on the increased cash value is deferred unt
