Permanent life insurance offers many unique benefits and a lifetime of coverage, making it a great choice for those who seek financial protection for themselves and their loved ones. 

With its array of policies and signature cash-value component, there’s plenty of information to sort into fact, fiction and mystery. That’s why we’re looking at some common misunderstandings and busting through five common myths. 

Myth #1: It’s complicated

With so many products to choose from—whole life, variable life, universal life to name a few—it can certainly feel like permanent life insurance is complicated.

Fear not! Think of permanent life insurance as a catchall term for any policy that lasts a lifetime and contains a cash-value feature.

Permanent life insurance policies differ most in terms of:

  • Flexibility
  • Level of market risk
  • Affordability

Remember: Quility’s licensed agents are always available and ready to make securing your permanent life insurance policy an easy and enjoyable process! 

Myth #2: It’s expensive

Not necessarily. 

Do a side-by-side comparison of term vs. permanent life insurance premiums, and yes, permanent insurance will appear more expensive. Put those numbers into the context of policy value, benefits, and savings over time though, and you may find permanent life insurance to be the most cost-efficient solution for your needs.  

Remember that permanent coverage may be more expensive than other types of coverage, but that does not mean it’s inherently expensive or unaffordable.  

Debts, estate taxes, care for dependents—these burdens would be far more expensive for your survivors than the expense of your policy. 

To lower your permanent life insurance premiums:
  • Purchase your policy as early as possible (premiums increase with age)
  • See if a universal policy works well for you (they can cost less than whole life policies)
  • If you’re healthy, consider a fully underwritten policy that requires a medical exam (policies that waive medical exams can cost more) 
Myth #3: I don’t need coverage for my entire life

Once the kids are grown and the mortgage is paid, it’s easy to conclude that life insurance is no longer needed. Not true! 

In the event of your passing, you would want to ensure that final expenses were not left as a burden to your loved ones. You may have life-long dependents (i.e. a special needs child or chronically ill partner), outstanding debts or estate taxes to consider.

Additionally, you may want to gift your children or grandchildren with a financial legacy or trust.  

Permanent life insurance is a solution that sticks by you while you’re alive and supports the ones you love once you’ve passed. 

Myth #4: Life insurance can’t help me support my financial future

Remember that in addition to the guaranteed death benefit, permanent life insurance policies also come with a cash value component. When you make premium payments on your permanent life insurance policy, a portion of that money goes into a cash value account. This money is invested by the insurer (usually in the stock market) and your money grows on a tax-deferred basis.

Once the cash value account is large enough, you can use it to cover your premiums, make withdrawals (think down payment on a home, kids’ college expenses, income stream during retirement) or borrow against it, using the cash value as collateral.  

Some permanent life insurance policies even come with the opportunity to earn dividends, allowing policyholders to benefit from the annual profits of their insurance company. 

Permanent life insurance is a great choice for individuals who wish to diversify their investments, build savings and financially protect their loved ones. 

Myth #5: I already have a term life policy, so I don’t need a permanent life policy

While term life may have been the best fit when you purchased your policy, our lives change and so do our coverage needs. Perhaps your health has worsened, your finances have improved or you’re ready to create a new retirement solution. These are all great reasons to consider converting from a term to a permanent life insurance policy. 

A health condition that has emerged or worsened will not affect your premiums when converting from term to permanent life insurance. You will not have to take a medical exam or go through the underwriting process again.  

How to convert term to permanent life insurance: 

  • Check your policy to see if conversion is an option 
  • Determine what the conversion period of your policy is (the timeframe in which you’re able to convert) 
  • Contact your Quility agent to make the switch! 

While there is no direct cost associated with converting term to permanent coverage, you can expect your premiums to increase.

These increases will be determined by: 

  • Your age
  • Amount of coverage you convert 
  • When you convert (some insurers offer credit rewards for converting early in the lifespan of your term policy) 
  • The type of permanent life insurance you convert to (with universal coverage costing less than whole life) 
Read More
Curious about converting your term life insurance policy to a permanent policy? Read our helpful pros and cons guide before you decide.
Get affordable permanent life insurance with Quility

Quility offers a variety of universal and whole life insurance policies from more than 80 life insurance companies. Our licensed agents are ready to customize the best policy for you today, and they’ll always be there down the road if policy adjustments are needed. 

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Brook van der Linde
Contributing Writer and Content Specialist
Brook van der Linde is a contributing writer and content specialist for Quility. She provides up-to-date articles on life, insurance and retirement via Quility’s online magazine. Her industry and leadership-focused content can be accessed via LinkedIn.

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The rates shown are based on past examples of quotes provided to people based on their demographic information. These are examples of the kinds of rates you can expect. All life insurance quotes and approvals are based on age and overall health at the time of purchase. Generally, non-smokers in good health will get the most affordable life insurance rates.

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