From the course: Risk Management and Insurance Planning: Designing for Client Needs
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Permanent life insurance
From the course: Risk Management and Insurance Planning: Designing for Client Needs
Permanent life insurance
Now that we've talked through the basics of term life insurance, understanding the basics of permanent life insurance will be much easier. That's because permanent insurance includes the basic characteristics of term life insurance. As we go through the next sections, we'll build on the concept of term insurance and discover permanent life insurance's additional features. life insurance is designed to provide coverage for the insured's lifetime with a fixed annual premium. Contrast this with term insurance, which had a contracted length. To understand how the insurance company keeps the premium fixed, I want to show you a diagram. Here is a graph depicting the mechanics of permanent life. The vertical axis is the premium and the horizontal axis is the age of the insured, and the red Red curve is the cost of insurance. General things you'll notice about the graph are that 1. The red curve shows the younger the person, the lower the premium. 2. You will see in the early years that the…
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