Americans are often in debt at a higher rate than most of our international counterparts but there are smart bets that can help pay it off. Life insurance for debt relief is one of them. 

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At times, getting in debt is a necessity. If you have a mortgage, for example, debt certainly isn’t a bad thing. Other times, you may need to borrow unexpectedly to cover costs that were previously unplanned. Either way, debt generally doesn’t need to be a concern as long as you can manage the repayments comfortably. But what happens to your debt if you die? In this guide, we’re looking at life insurance for debt and how it can help your loved ones financially after you’re gone.

## **What happens to your debt when you pass away?**

Talking about death isn’t exactly a fun topic. Throw in debt, and you’ve got yourself a double whammy of things no one wants to discuss. Ever. Ignoring death and debt, however, can leave your loved ones in financial difficulty should the worst happen to you.

That’s because your debts don’t magically disappear if you pass away. Instead, they go to your estate, which is then used to pay off any debts you might owe. But what happens if your estate doesn’t cover everything? Or, perhaps you don’t want the things you leave in your will to pay off the debts–a house, for example.

Then there are cosigners. If you’ve cosigned something but pass away, the other person becomes liable for the debt. All of these scenarios could see the people you leave behind burdened with significant debt.

So, what’s the answer? It might just come in the form of life insurance.

## **Life insurance for debt: can it help?**

A life insurance policy can help with debts you owe. Its death benefit goes to the person named as your beneficiary and therefore will help them pay off any debts you might still have when you pass. It can act as a cost-effective method that allows your family to carry on with some financial stability.

The amount you decide to get in coverage may depend on the debt, though there are plenty of other reasons for getting life insurance (more on that in a bit). Essentially, life insurance can help in several ways, including paying debts.

## **What debts can life insurance help with?**

**Mortgage**

A mortgage is one of the most common debts held by Americans. It’s also the largest, as buying a home will probably be the most expensive purchase you ever make. It’s also more likely to have a cosigner with a mortgage, especially if you’re buying with your spouse.

If you passed away unexpectedly, [your spouse would be liable to pay the entire mortgage](https://www.beamplify.com/blog/the-newlywed-game-how-to-do-finances-when-married). Even if they can afford to cover the payments, it’s unfair to shoulder that extra financial burden on them, as it would mean more money coming out of their pocket.

You can avoid such a scenario with a life insurance policy as the death benefit can cover the mortgage repayments. A mortgage is one of the key reasons people get life insurance coverage, and if you have a house with a mortgage, looking into a policy should be right at the top of your list.

**Credit cards and loans**

In an ideal world, we would all be credit and debt-free. Unfortunately, that’s not how things work, and the average American [debt totals a whopping $52,000](https://www.businessinsider.com/personal-finance/average-american-debt?r=US&IR=T). Of course, that includes a mortgage, but it still all adds up.

Average US credit card debt stands somewhere at around $6,000-plus. It’s a considerable amount, especially if you suddenly passed away and left the money owed to a cosigner. Automobile loans also aren’t forgiven at death, so you could pass on a significant amount of debt to your family paying, leaving them to pay for the credit card and the car.

Fortunately, life insurance also covers your credit and other loans. If you have a policy in place when you pass, your beneficiary can use it to pay off any debts you left behind, making their life easier (at least financially) in the process. It can also work well if you [own a business](https://www.beamplify.com/blog/thinking-about-starting-your-own-business-heres-what-you-need-to-know), and you’ve cosigned debts with your business partner.

**Student loan**

Life insurance can help with student loans, which has become one of the most common debt [themes among millennials](https://www.beamplify.com/blog/heres-what-you-need-to-know-about-millennial-life-insurance) and Gen X. There is over $1.5 trillion in student debt in the US, and it’s typically one of the harder debt types to cover yourself against when borrowing privately.

Federal student loans are forgiven at death, but any private money owed becomes a debt of the estate. If you owe this type of debt, your cosigner or estate needs to pay, but a life insurance policy can ensure that everything is taken care of and help pay off the existing student debt.

## **Which type of life insurance policy should I get?**

So, we’ve established that life insurance can cover all sorts of debts should you pass away, but which policy should you get? There’s more than one type of life insurance, and it’s worth knowing how the primary options work.

**Term**

A [term policy](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question) is a form of life insurance that lasts for a specific amount of time, usually between 5 and 30 years. If you die during the period you’re covered, your beneficiary will receive a death benefit. However, once the term ends, you’re no longer covered–and if you wish to renew, you will need to do it at the renewal age. That will likely mean paying a higher premium as you will be older than when the policy was first taken out.

**Group**

Group life insurance is often provided by employers and gives you some form of coverage. However, the amount you’re covered for is usually limited, meaning it’s probably not enough to leave a significant sum to your beneficiary–especially if you have significant debts that need taking care of. Think of [group life insurance](https://www.beamplify.com/blog/is-life-insurance-from-your-employer-good-enough) as a handy bonus, but it’s always worth getting an individual policy on top.

**Permanent**

Now, this is where things get interesting. A [permanent life insurance policy](https://www.beamplify.com/blog/are-permanent-life-insurance-policies-worth-it) gives you a death benefit, just like term coverage, but it also has accessible benefits while you’re still alive. Alongside the death benefit is something called “cash value.” The cash-value [element lets you build wealth](https://beamplify.com/blog/how-to-build-wealth-with-permanent-life-insurance) while you’re still alive. How does it do that? When you pay into the premiums, you’ll cover the death benefit and the [cash value](https://www.beamplify.com/product/cash-accumulation). The cash value can be invested in a high-interest savings account or equities that you choose. This amount grows over time and you can access the money you’ve accumulated later on in life. That means it can be a great little retirement top-up or even pay for your kids’ or grandkids’ [college](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning). Unlike many other savings accounts, it also grows tax-free, so you build wealth without giving the taxman a significant chunk of the money you’ve accrued.

**Combination**

Now, this is the best of both worlds: A combination policy is essentially a permanent and term policy, which means you can save for your future while protecting you and your family from temporary debt, such as a mortgage or student loans. This way, you can lock in a low rate at a young and healthy age today, and build wealth and protection all while staying on budget. Take a look at some [combination policies](https://quotes.beamplify.com/basic) today.

**In conclusion: Planning for every scenario with life insurance**

Life insurance works well to safeguard your loved ones against debt. And if you opt for a permanent life insurance policy, you can see to it that debts are covered if you pass while also having the opportunity to build wealth when you're still alive. You may even decide to use the money you accrue to pay off debts, so your family doesn't have a dime to pay if the worst happens to you. No matter what angle you come at it from, life insurance for debt is a smart way to ensure that [finances are covered](https://www.beamplify.com/blog/why-life-insurance-is-a-step-to-financial-protection) and that your family is well looked after.

Life Insurance for Debt: Can it help?

The world is changing rapidly with an emphasis on customer centricity, technology, and transparency across every industry. Read about current trends affecting permanent life insurance. 

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It’s safe to say that we’re all looking ahead to post-COVID life in the US after nearly 18 months of local and national quarantines, travel restrictions, and a tumultuous presidential election cycle upending the way most Americans lived their day-to-day lives. How we interact with each other, how we consume, and what we value most as a society have been put into perspective in the midst of tragedy and loss. Before we get to why you should get permanent life insurance now, let’s talk about a [few major trends](https://beamplify.com/blog/10-life-insurance-trends-to-watch-in-2021-part-one) that will have an impact on us all.

## E-Commerce is THE commerce

According to the U.S. Census Bureau, [Americans spent $791.7 billion in 2020](https://www.cnbc.com/2021/02/19/e-commerce-surged-during-covid-groceries-sporting-goods-top-gainers-.html), which was up more than 32% from 2019, with some studies showing that COVID accelerated e-commerce growth by 5-6 years. What does this mean for life insurance? Well officially, you can now buy a house, car, home and auto insurance, and just about anything else you want from the comfort of your keyboard. But life insurance is one of the few insurance sectors that still has a large in-person, speak-with-an-agent, multi-step selling process.

As we move towards a less is more approach whether it’s fewer clicks or fewer conversations, it’s never been easier to sign up for a life insurance policy that suits your needs. And like all other products you’re buying online, it’s easier to do research, compare prices and value, and move at a pace that’s wholly up to you.

However, unlike electronics or any online goods, your life insurance only gets more expensive over time. Your cost of insurance rises every year as we get older and our health conditions change. That means the best time to maximize savings in your policy is now!

## The Biden presidency and the new era of taxation

In an effort to shore up government programs, [President Biden has set forth a new era of taxation that affects just about everyone](https://taxfoundation.org/joe-biden-tax-plan-2020/#Key). The initial hikes are aimed at individuals who earn more than $400K a year and corporate income tax rates. According to the Tax Foundation, Biden’s new tax plans would raise government revenue by $3.3 Trillion over the next decade and would lead to about 7.7 percent less after-tax income for the top 1 percent of taxpayers and about a 1.9 percent decline in after-tax income for all taxpayers on average. Some of the highlights of the plans include:

*   Repeal the Tax Cuts & Jobs Act components specific to high-income filers
*   Impose a 12.4% social security payroll tax for wages over $400K
*   Increase corporate income tax to 28%
*   Reestablishes the First-Time Homebuyers’ Tax Credit
*   Temporarily increase the generosity of the Child Tax Credit and Dependent Credit

Long story short, [more taxes are in store for all of us](https://beamplify.com/blog/is-permanent-life-insurance-tax-deductible) and the ripple effects will ultimately mean less spending cash in our pockets.

## Economic conditions & globally decreasing financial health

For the past few years, the financial health of global markets has been declining with COVID rapidly pushing us into dreary economic forecasts. In 2020 alone we saw a shrinking of the global economy by 4.3% - worse than the 2008 recession and the largest contraction since The Great Depression. While forecasts for this year show a rise in economic activity, ultimately the effects of COVID, specifically in the US, are longstanding and will need to be addressed for years to come. We’ve seen tremendous positive growth just in Q1 of 2021 and that recovery is likely to follow throughout the remainder of the year but when the government safety net that’s been built just for the pandemic gets pulled back, it will take some time to adjust the national balance sheet and for people to gain economic confidence.

Not to mention that the large federal deficit, longer-term healthcare crisis, and the uncertainty of Social Security and Medicare have placed a lot of pressure on the US government and it's probably going to stay that way within our lifetime. In times like these, people will spend less and income levels will take a hit at every tier.

## So why should you get permanent life insurance now?

There are definitely some doom and gloom parts to this article but we promise we’re ending on a positive note. [Three words - tax-free savings](https://beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). Most people are aware of [term life insurance](https://beamplify.com/blog/term-or-permanent-that-is-the-question) but permanent life insurance is an investment vehicle that the wealthy have been using for generations to save, invest, and transfer assets tax-free. Permanent life insurance has a death benefit so that your loved ones receive a payout in your passing but also has the benefit of a savings account that can be accessed while you’re still alive. The cash value savings portion earns interest at either a fixed rate (indexed universal life insurance or IUL) or a variable rate (variable universal life insurance or VUL). In either plan, the interest you earn based on how your premiums are invested is completely tax-free.

Given the economic conditions and new tax plans, getting a permanent life insurance plan is a great way to set yourself and your family up to be both protected and earn and transfer wealth, tax-free. With the advent of e-commerce, you can sign up for a life insurance plan online and avoid the uncomfortable selling process that insurance as a whole is generally known for.

We’re a bit biased but Amplify Life Insurance is a great first step in your permanent life insurance journey - [start by getting a quote today](https://quotes.beamplify.com/basic)!

Current Trends and Why You Should Get Permanent Life Insurance Now

Getting life insurance in your forties is a great financial choice to protect your loved ones and grow tax-free wealth. 

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Your thirties is seen as the optimal time to get life insurance, yet that doesn’t mean it’s too late for people to get it in their forties. But what should you know about getting a life insurance policy as you approach middle age? Do you get term or permanent coverage, do it for the kids and spouse, or grow your wealth while you’re still alive? So many questions. Fortunately, we’ve got the answers with everything you need to know about life insurance in your 40s.

### **Does a debt-free life await?**

Americans aged between 40 and 55 are the most likely to have debt. Much of the money owed is on a mortgage, but that doesn’t mean you’ll want to leave it to your family to deal with should you pass away. Don’t worry too much, though–a life insurance policy can help reduce your debt if you’re no longer around.

You’re most likely at the stage in your life where debts will remain stable, and your income is secure. That makes it even easier to choose a life insurance policy as your incomings and outgoings should be relatively stable.

Customize the policy around your financial obligations and safeguard your family against debt in the process. Should the worst happen and you pass away, the death benefit left to your spouse will likely be enough to cover any form of long-term debts, allowing the rest of your family to carry on without financial burden.

### **A safety net for your spouse**

If you’ve built a life with your spouse, the last thing you want to do is leave them fending for themselves in the event of your death–even if you’re both the breadwinners of the family. Your unexpected loss could lead to your spouse facing unrealistic financial burdens as they pick up the pieces after you’re gone.

A life insurance policy lets you add an extra layer of security, with factors like mortgages, bills, health costs, and your child’s expenses taken care of. It will help your spouse get on with life–at least from a financial perspective. It will allow them to lead a similar quality of life while ensuring they have enough funds in the process.

This is especially true if your spouse is a stay-at-home parent, as they would be left without any significant income if you passed away. Getting life insurance in your 40s is one way of crafting a sound financial plan should the unexpected happen and you’re no longer around.

### **It’s all about the children**

People in their forties could just as easily have newborns as they do children heading into their first year of college. Regardless of their age, you want to ensure that they are financially protected in all scenarios.

One of the key drivers for getting life insurance in your 40s is likely to be your children. They are your largest responsibility and have the greatest expenses attached to them, be it childcare, school fees, school supplies, groceries, clothes–you name it.

Many parents in their 40s opt for a [term life insurance policy](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question), which lasts for a set period of time. This time span usually covers their kid’s most pivotal ages and is when they rely on their parents financially. You can choose the amount of coverage needed based on the ages of your children and have it until they’re no longer financially dependent on you. However, while a term policy might look like the best option on paper, it’s not the only life insurance coverage available.

### **Life insurance, in life and in death**

Most people in their forties get a term policy because they expect their situation to change (retirement in later life; kids become financially independent), but getting coverage for a set period of time is essentially short-term thinking.

With a [permanent life insurance policy](https://www.beamplify.com/blog/what-is-the-cost-of-permanent-life-insurance), you can cover every factor needed–both in life and death. That’s because a permanent policy lets you build wealth while you’re still alive. Wealth building works alongside the death benefit, with both of them growing simultaneously.

So how do you build wealth? A permanent life insurance policy has something called “[cash value](https://www.beamplify.com/product/cash-accumulation)". The cash-value element will accrue over time (as you pay into the premiums), and you can access it later in life. It can come in handy and pay for the [kid’s college](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning), act as a [retirement plan](https://www.beamplify.com/blog/permanent-life-insurance-for-retirement-income-how-does-that-work), or be used to spend on anything you like.

Even better, you can [build your wealth tax-free](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings), something you won’t find with [regular investment accounts](https://www.beamplify.com/blog/what-are-the-different-investment-types). It means that, over time, you can choose to invest in a high-interest savings account or public equities, then change your investment options without facing any tax liabilities.

### **Don’t rely on your group life insurance at work**

Of course, you may find yourself in a situation where your current employer already offers a life insurance policy. This is known as [group life insurance](https://www.beamplify.com/blog/is-life-insurance-from-your-employer-good-enough) and typically doesn’t require a medical exam–you start the policy when you begin employment.

On paper, everything looks great. And while group insurance can come in handy, it’s worth getting individual coverages, especially in your 40s. Group policy insurers are chosen by the employer, and you usually have a cap on the amount you’re covered for–it’s unlikely to be enough to take care of your spouse and children.

So, yes, by all means, be happy about your group life insurance policy at work. Just don’t solely rely on it to offer complete financial safety to your loved ones if you pass. It also doesn’t come with a wealth-building tool like permanent life insurance.

### **In conclusion: Life begins at 40**

Even though you can get the \[best rates in your 20s (https://www.beamplify.com/blog/should-i-get-life-insurance-in-my-20s), it’s not too late to get life insurance in your 40s. Covering yourself at this stage in life still gives you plenty of time to build wealth with a permanent policy while also ensuring that your family is well looked after should the worst happen. They say life begins in your 40s, and for many, so does a life insurance policy.

Everything You Need to Know About Life Insurance in Your 40s

A life insurance medical exam is often necessary to approve and get the lowest possible premium. What does it entail?

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No one likes exams, but sometimes they're a necessity in life: at school, getting your driver's license, becoming a medical or law professional, and, oh yeah, life insurance. A life insurance medical exam is usually required before you get coverage, as the insurer needs to determine your health status before they decide on a policy. But how do you get ready for the exam?

In this guide, we've got everything you need to know about life insurance medical exams and how to prepare for them. 

### **Why do I need a life insurance medical exam?**

When you apply for life insurance, more often than not, you're required to take a medical exam as part of the underwriting process. This is so the insurer can better understand your current health status and the health classification you receive. Ultimately, the results of your medical exam determine how much you will pay for life insurance. 

Taking the exam can lock you into the lowest rates if your health is in good shape. Therefore, it’s important to do the exam–it’s not just to catch you out to see if you have a [pre-existing condition](https://www.beamplify.com/blog/can-i-get-life-insurance-with-a-preexisting-condition%5C). The medical exam helps insurers make better decisions about the type of policy you’ll need. 

### **Where does the exam take place, and what can I expect?**

After submitting the application for life insurance, a representative will get in touch to schedule the exam. Usually, you can have it at your home, an exam center, or at your place of work, though the last one might not be the most private place available. 

You can expect two sections to the exam: an interview and the physical exam itself. The interview consists of questions previously answered on the application, just to ensure that everything lines up and nothing has changed.

Then there’s the physical exam, where you’ll likely need to provide a urine sample and have blood drawn. Overs 50s applying for a high amount of coverage may also require an electrocardiogram (EKG). 

### **What does the exam look for?**

The exam looks at your general health to see if you're right for the life insurance coverage you've applied for. Along with a blood and urine check, the person conducting the exam will look at your previous medical history to get a better picture of your health status. 

They will also take your height and weight measurements to determine your BMI, which measures body fat. Finally, there's a blood pressure check and, in some cases, an electrocardiogram. 

### **Prepping for the life insurance exam**

**One week before the exam**

One week before the exam, try to eat well and avoid processed foods high in sodium and sugar, instead opting for leafy greens, whole grains, and nuts. Also, don’t forget to drink plenty of water to flush your system. Avoid caffeine if you can–or at least limit it along with alcohol. 

**One day before the exam**

Rest well the night before the exam, so you're in tip-top shape. Try not to stress either, as this will only raise your blood pressure. Being calm will also help you feel more relaxed throughout the exam. 

**Exam day**

It's all about the H20 on the day of the exam. Make sure you drink plenty of water, so all the good stuff is running through your system. You'll also want to have your information to hand, such as photo ID and medication details. 

### **When can I expect my results?** 

The wait time for results is dependent on the insurer. They will need to review everything and could possibly contact you with the results, or you might be able to get them directly from the medical team hired to carry out the exam. 

As a rule of thumb, it might take around 14 days before you receive your results. If you feel you’ve been waiting for too long, get in touch with the insurer for an update about when you can expect the results. 

### **What happens if I’m denied life insurance?**

In an ideal world, everything will go off without a hitch, and you'll get the green light for your [term](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question) or [permanent life insurance policy](https://www.beamplify.com/blog/who-needs-permanent-life-insurance-the-answer-might-surprise-you). If, however, you're rejected, you should request a formal reason in writing (if you haven't been given one already).

Study the reasons and look out for any clerical errors, such as incorrect data entry or even a false positive on your test. A false positive shows that you have a disease when you don’t actually have one. Ultimately, if you’re denied for valid reasons, there may be things you can do to improve your health–such as improving collateral or weight et cetera–before reapplying. 

### **When don’t I need an exam?** 

The [Covid pandemic has changed](https://www.beamplify.com/blog/life-insurance-during-covid-the-impact-of-the-pandemic) the application process, though things are slowly getting back to normal. Many providers stopped doing exams due to social distancing restrictions, so there's still a chance you won't need to do one, depending on who you get coverage with.

It's also unlikely that you'll need to take a medical exam if you [get a group life insurance policy](https://www.beamplify.com/blog/is-life-insurance-from-your-employer-good-enough) through your job, as they're usually included in your employee benefits. While group life insurance can be handy, it's unlikely that it will offer a high level of protection. Therefore, it's always worth exploring getting individual coverage alongside your work policy. 

### **In conclusion: preparing for a life insurance medical exam**

A life insurance medical exam can help lower your premiums and lock you into the best rate. By knowing what to expect before it takes place, you can feel more relaxed on the day and hopefully tick your exam off as a minor part of getting a life insurance policy. 


How to Prepare for a Life Insurance Medical Exam

Discover a variety of tax planning strategies that can lower your financial burden. 

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Let’s face it–no one likes paying tax, but it’s something we all have to do. And look, we get it; taxes help pay for vital things that help keep America running. It’s just that, you know, paying a little bit less would be nice, especially when it comes to savings accounts. Still, there are ways to be smart with your tax planning strategies so you can save more and pay less. How, you ask? That’s what we’re here to tell you with this guide to helping you keep your savings safe. 

### **How tax works**

We're sure you are familiar with tax and everything it entails. But just in case you need a little refresher guide, income is taxed at the deferral, state, and local levels, with earned income subject to additional levies that help fund Social Security and Medicare, amongst others.  

Taxes are unavoidable unless you're ready to face the consequences of possible jail time, though who wants to go to prison for owing money? When it comes to your savings, you often need to pay tax on the money accumulated throughout the years. But there are some ways to build tax-free savings.

**Here’s what you need to do.**

### **Invest in Municipal Bonds**

When you purchase a municipal bond, you're basically lending money to a state or local government for a set number of interest payments over a specific amount of time. Now, you're most probably thinking, "why would I do that?"

However, once the bond reaches its maturity date, you will get back the full amount invested. On top of that, you’ll also receive interest, which is exempt from federal taxes and possibly even state and local levies. Therefore, tax-free interest payments make municipal bonds an [attractive investment type](https://www.beamplify.com/blog/what-are-the-different-investment-types) for anyone thinking about their future. 

Municipal bonds also tend to be a safer bet than corporate bonds, as history shows them to have lower default rates. There is a catch, though: they also have lower interest rates, which may not appeal as much to some investors. 

### **Start a business**

Ok, so [starting a business](https://www.beamplify.com/blog/thinking-about-starting-your-own-business-heres-what-you-need-to-know) with the sole purpose of saving a buck on tax might not be the best approach. But if you’re thinking about doing your own thing anyway or already own a business, there could be some tax relief coming your way. 

You can deduct a ton of expenses, which ultimately reduces the amount of tax you need to pay. If you’re self-employed, it also means you can claim your health insurance premiums, though [not your life insurance](https://www.beamplify.com/blog/is-permanent-life-insurance-tax-deductible) ones–worry not, however, as we’ve got some good news about life insurance in a bit. 

As a business owner, you may also be able to deduct part of your home and office expenses. Just make sure you follow the [IRS guidelines](https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction), as you don’t want any nasty surprises from the taxman when it comes to doing your returns. And while the deductible amount doesn’t impact your savings accounts directly, you can use the money saved on income tax and use it with [different investment concepts](https://www.beamplify.com/blog/investment-concepts-you-should-know-about) to save your money wisely. 

### **Take advantage of retirement accounts**

As of 2021, you can reduce taxable income on contribution in your 401(k) or 4013(b) plans up to $19,5000. Plus, [if you’re 50 or older](https://www.beamplify.com/blog/permanent-life-insurance-for-seniors-it-makes-sense-we-promise), you can add a further $6,500 to the basic workplace retirement contribution. For example, if you earn $75k per year and contribute $19,500 to your 401(k), you can reduce taxable income to $55,500. 

Just remember that even though contributions are deferred, you will still need to pay taxes on them when it comes to withdrawing your savings later in life. So in one sense, you can save on your income tax, but you’ll need to cough up during your retirement when it's time to access all of those savings. 

**Individual Retirement Accounts (IRAs)**

You could also invest in an Individual Retirement Account, which could help you save on taxes in a multitude of ways. Traditional IRAs allow you to deduct the amount you contribute from your income, lowering your tax burden for the year in the process. 

The money in your traditional IRA account also grows tax-free, so you don't pay taxes on the interest it earns. Sounds great, right? Well, it’s not too bad at all, but there are some drawbacks. When you take the money out, you will have to pay income tax at your current rate on your deposits and the money earned while it was in the account. 

In a Roth IRA account, on the other hand, you put in after-tax dollars that then grows tax-free and you don’t have to pay taxes on all the gains. However, there are other considerations, including [income and contribution limitations](https://www.schwab.com/ira/roth-ira/contribution-limits). If you make more than $125,000 as an individual taxpayer then you will start phasing out your ability to contribute to a Roth IRA. Additionally, if you are under that income level you can only contribute up to $6,000 a year.

### **Get permanent life insurance**

There is also the option of taking out a [permanent life insurance policy](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance). Now, you’re probably asking yourself, “what’s life insurance got to do with tax-free savings? Isn’t it related to when I die?”. The answer is yes, and no. Allow us to explain.

Sure, a permanent life insurance policy has a death benefit that looks after your loved ones when you pass. But it also has a [cash-value element](https://www.beamplify.com/product/cash-accumulation) that allows you to build wealth while you’re still alive. Essentially, that means it’s a form of savings account, and it’s tax-free. 

When you pay into a perm policy, you’re covering two pots: death benefit and cash value. These both grow each month when you pay the premium. When it comes to withdrawing your cash value, you can do so in the form of a 0% loan to yourself. 

Because you’re loaning from yourself, the tax owed is zero–you can’t pay tax to yourself. Then, when you pass away (hopefully many, many years later), your death benefit pays off the loan. However, because the death benefit also grew every time you paid the premium, you should still have plenty left to leave something behind for your loved ones. 

In a nutshell, all of this means that you can grow your wealth and tap into savings tax-free. Now that’s what we call smart tax planning strategies that help you win. 


### **In conclusion: Smart tax planning strategies with life insurance** 

It’s one thing paying income tax on your daily earnings; it’s another having to do it for the money you worked so hard to save. However, with a permanent life insurance policy, you can enjoy tax-free savings while also protecting your loved ones against unforeseen circumstances. You’re covering all bases and enjoying greater financial freedom for you and your family. 


Tax Planning: Here’s the Smart Way to Keep Your Savings Safe

Life insurance made easy is our company goal and our latest guide takes you one step closer.

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Whether you’re thinking of getting life insurance or are just curious, you probably have a few questions. “Is it something only older people get?” “what coverage is available?”, “do I get a free PlayStation with my policy?”. Ok, so we can’t answer the last one (though it’s probably a no), but we can respond to the others–and more. So read on for life insurance made easy as we answer your burning questions. 

### **1. Isn’t life insurance something only older people get? **

One of the most common misconceptions about life insurance is that it’s only for older people–those well over 40 who want to cover themselves before they reach the seasoned stage of life. After all, why would you need life insurance if you’re younger right? 

It turns out that getting life insurance in your younger years could really work out to your advantage. That’s because the older you are, the higher your premiums. So people in their forties and fifties are likely to pay more for their life insurance coverage. 

Young and healthy people, on the other hand, pay lower premiums. Life insurance in your twenties and thirties will be considerably cheaper than if you were to get it later in life. 

Therefore, you’re likely to be better off [investing in life insurance](https://www.beamplify.com/blog/is-permanent-life-insurance-a-good-investment) in your younger years. This is especially true if you opt for permanent life insurance (more on that in a bit), as you lock in the premiums and essentially pay the same price at 55 as you would a healthy 25-year-old. 

### **2. Do I need medical testing?**

By this point, you’re probably still thinking if life insurance is right for you but may also wonder what’s involved with getting a plan. One of the most important life insurance questions people ask centers around medical testing and if it’s needed for a policy. 

The answer is, sometimes. It depends on the individual who applies for insurance, as well as the [amount of insurance they apply for](https://www.beamplify.com/blog/this-is-how-much-life-insurance-really-costs-and-all-the-ways-you-can-use-it-while-youre-alive). However, as a general rule of thumb, the healthier and younger you are, the less likely it is that you’ll need to go [through rigorous medical testing](https://www.thebalance.com/what-to-expect-your-life-insurance-medical-exam-2645799). 

You may just have to answer a simple questionnaire. If you’re older and in poorer health, however, then it’s likely that the provider will require more extensive information. Insurance companies need to assess the risk of those they’re insuring, so more due diligence may be required in some scenarios. 

### **3. Aren’t I throwing my money away if I don’t die?**

Ah yes, the other one of the life insurance questions. It only pays out when you die, and who wants to think about that? When looking at life insurance as something that only kicks in when you pass, it can feel like a lose-lose situation. 

You don’t get anything if you carry on living. But you’re not, you know, dead. So that’s a win. Then again, if you do die, it’s jackpot time, because your loved ones receive a payout. Ah yes, but you’re still dead. It’s a bit like being caught between a rock and a hard place. 

While the death benefit if you die is really important and worth its weight in gold, it’s not the only aspect of life insurance. If you get term coverage, then, yes, the payout only comes after you pass away. 

But if you get [permanent coverage](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance), you’ve got options–and they kick in while you’re still breathing. The game suddenly changes when you find out that having life insurance while you’re still alive means you can also benefit.  Now it’s also an investment vehicle.

### **4. What coverage is available?** 

There are two primary life insurance options: term and permanent, and the one you choose has a significant impact on the type of life insurance you receive. But what’s the difference between the two?

**Term life insurance** 

A term life insurance policy covers you for a specific amount of time, typically between 20 and 35 years. If anything was to happen to you in that time, your loved ones would receive a payout after you’ve passed. 

However, should you live through the entire policy (which is the primary goal, right?), you won’t receive a penny. And if you want to renew the policy when it expires, your premiums will increase with your age. Therefore, someone renewing in their fifties or sixties will have to pay a lot more for their new policy than they did their previous one. 

Term life insurance can be beneficial if you only want cover for a certain amount of time–say, until your mortgage is paid off in full or [your kids finish college](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning). But it literally has no benefits apart from paying out to your loved ones if you pass away.

**Permanent life insurance** 

Often referred to as “whole life,” permanent life insurance doesn’t expire. It’s initially more expensive than term coverage, but your premiums don’t change from the first time you take out a policy. So you pay the same premium at 20 as you would 45. 

Permanent life insurance also gives you much more than a death benefit. It has a cash value aspect, with the majority of the payments you make on your policy going into a savings vehicle called “cash value.” Over time, your cash value increases and can be accessed later in life. 

On top of that, it’s also tax-free. Most investments demand that you pay tax on any earnings. With a permanent life insurance policy, however, you don’t need to worry about paying for tax as it accumulates over time completely tax-free. 

That’s because the money you take out (cash value) is loaned from yourself and won’t be subject to taxation. Once you pass, the death benefit–which has also grown over time–pays back the loan, and your loved ones get the rest of the money leftover. 

[Learn more about term and permanent life insurance options](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question)

### **5. Where can I find a policy?** 

Find your perfect policy by using Amplify. We offer a range of providers and let you compare which options–term or permanent–are best for you and your needs. We’re unbiased, which means there are no agents coercing you to get the deal that gives them the most commission. Instead, you can use our transparent and simple process to [get a quote](https://quotes.beamplify.com/quotes) and find coverage that works for you. In other words, life insurance made easy. 

### **In conclusion: Q&A** 

Life insurance can be a savvy investment that you can get in your younger years and benefit from while you’re still alive later in life. You just need to know which policy is the right one, and hopefully, our life insurance questions can provide more clarity and knowledge so you can make a decision about the best option for you.


Your Top 5 Life Insurance Questions, Answered

Permanent life insurance has yet to adapt to the technologically advanced world we live in and the customer-centric approach of doing business. That's why we started Amplify.

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### **Customer-centric permanent life insurance?** 

Many say it’s an oxymoron. In an era when most of us are used to accessing information and products at our fingertips, these are all too common experiences we hear:

- Receiving conflicting recommendations from various life insurance agents and companies 😖
- Cringing at the thought of getting blood drawn for a life insurance application 💉
- Waiting for months for an approval ⏰
- Still confused about policy details after getting a plan 🤯

Prior to Amplify, my own experience mirrored many of those pain points.  I purchased a universal life policy myself after getting married. After meeting with an agent, I liked the benefits but realized that there was no place to research and compare quotes on my own. All the product information was filtered through the agent in myriads of spreadsheets and brochures. After getting approved, I almost gave up because I couldn’t figure out where and how to pay for the policy besides using a physical check! The experience of getting a permanent life policy was vastly different from any other product I had purchased. It felt like navigating through a blackbox gated by life insurance agents and wired by phones and paper. A customer-centric experience aims to remove all friction in a customer’s journey. In permanent life insurance, that means easy access to information, personalized products and services, fast and painless underwriting, and a seamless post-purchase experience.

**Before we go further, you might ask: what is permanent life insurance?**

[You can read more details here](https://beamplify.com/blog/can-i-use-permanent-life-insurance-as-an-asset-class-heres-what-you-need-to-know) (yes, we put all the information in one place!) The first known life insurance policy was issued in the 16th century. Since then, the industry has gone through many product and regulatory cycles but mainly evolved around agent-driven education and distribution. Sales agents traditionally serve as the gateway between customers and insurance products. As more experienced agents move upmarket to focus on corporations and affluent customers, they have been leaving the mass market behind. Permanent life remains difficult to access for mass consumers due to education and distribution barriers.

Existing life insurance carriers and brokerage firms have been unable to break those barriers due to two major challenges: (1) the current system is designed for agent-driven distribution. It is designed with minimal interaction with end-users and little automation; (2) much of the permanent life insurance industry is still running on legacy infrastructure, which hinders innovation. 

### **Why we built this technology**

The magic of technology is in its ability to serve the masses efficiently and make the world a flatter, better place. Amplify is a technology-enabled life insurance investment platform that is bringing that same vision to hundreds of millions of mass-market consumers in the U.S. With Amplify, we are providing information transparency and simple access to financial security through a digital platform so that every consumer is empowered to make the right decisions for their financial future.

[When we started Amplify](https://beamplify.com/blog/founder-story-amplify-origins), we realized that in order to deliver modern experiences to customers, we needed to rethink and build our core platform from the ground up based on first principles. [We built our own quoting engine to provide quotes in seconds](https://quotes.beamplify.com/quotes) to customers so that they don’t have to speak with a person just to view quotes. We personalize plan information and application flow based on each user's preference, whether they prefer a digital or human-assisted process or a combination. We are also streamlining the approval process with pre-underwriting and instant decisioning so customers don’t have to go through the hassle of getting a medical exam and wait for weeks to get covered. We are in the dawn age of transforming how consumers obtain financial security.

Customer centricity also stems from innovation in insurance products. At Amplify, we are redefining the meaning of life insurance and enabling customers to use their life insurance for saving and investments. Imagine that you can invest in alternative assets inside your life insurance policy and access the [growth in a tax-efficient manner](https://beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). We are leading a new wave of life insurance products that empower customers to build security and wealth however they want.

Amplify’s offerings today tap into a sliver of what’s possible with permanent life insurance products, and we’re working to expand that while building the most customer-centric platform for millennial and Gen X customers who are eager to take their financial future into their own hands -- the movement is just getting started.


Building Customer Centricity In The Permanent Life Insurance Industry

There are a multitude of ways to use life insurance benefits beyond the death benefit. 

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A permanent life insurance policy gives you plenty of benefits, including the ability to look after your loved ones when you pass yet act as a wealth builder when you’re still alive. But how can you use life insurance benefits to your advantage? We’ve got the lowdown in this guide with everything you need to know about life insurance benefits. 

### **Create another source of income**

Who doesn’t like more money? Especially when it’s a relatively safe bet and you don’t need to take any risks to get it. With a [permanent life insurance policy](https://www.beamplify.com/blog/who-needs-permanent-life-insurance-the-answer-might-surprise-you), you can create a second source of income through its [cash-value](https://www.beamplify.com/product/cash-accumulation) aspect. 

It works with you paying into two pots in your policy: the death benefit and cash value. With the cash-value element, you build wealth over time and then access it later in life to [use as extra retirement income](https://www.beamplify.com/blog/permanent-life-insurance-for-retirement-income-how-does-that-work), or for pretty much anything you want to spend it on. 

One policy type is an index universal life (IUL), a policy which grows an impressive 6%-8% on average and lets you build up a nice little nest egg for your older years. The way it works is that your returns are based on an index, like the S&P 500, but with a cap and a floor, which means you make returns up to 12% (for example) and you will never lose any money if the market goes down. This product type is for the young investor who doesn’t want to suffer any market losses. The [younger you start with permanent life insurance coverage,](https://www.beamplify.com/blog/should-i-get-life-insurance-in-my-20s) the more wealth you can build over time. 

There’s also the option of variable universal life insurance (VUL), which is another form of permanent life insurance. It gives you more flexibility than a traditional perm policy, as you can access the funds at any time and not just in your later years. 

VUL works in a [similar way to a mutual fund](https://www.investopedia.com/terms/m/mutualfund.asp), with exposure to specific market fluctuations able to generate high cash returns. However, unlike an IUL, which is a very fairly safe investment, VUL is more risky. While it can generate returns from market fluctuation; it could also lead to losses. This product type is for the aggressive investor who wants the highest returns in the market and is willing to account for market losses. As an investor, you can choose the funds you want to invest in and make changes throughout the policy’s lifetime without suffering any taxation or tax liabilities. 

A VUL policy gives you increased flexibility over the cash value. And, when done right, it can boost your wealth while providing a death benefit to your loved ones when you’re no longer around. 

### **Save tax-free**

Taxes might be a fact of life, but they don’t need to be with permanent life coverage. It’s one thing being able to build wealth with your life insurance policy; it’s another when you [can do it tax-free](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). And that’s exactly what you can do with a [permanent life insurance](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance) policy. 

Other than a tax-free death benefit for your loved ones, you can also grow your wealth without paying tax by accessing the cash value in the form of a 0% loan against yourself. 
Because you can’t pay yourself taxes, the money you withdraw is entirely tax-free. 

Then, when you pass, the death benefit pays off the loan, with the rest of it going to your loved ones. Most savings accounts require you to pay tax on the wealth you’ve built, but there’s no need to worry about doing that with a perm policy. 

### **Pay for your kid’s college**

When you access your cash value, you can use it to do pretty much whatever you like. One option could be paying for [your kid’s college](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning). If you don’t have a 529 plan, a permanent life insurance policy may be ideal for covering the expensive costs associated with college. 

You might think that the idea of using life insurance to cover the kid’s college fees is somewhat unconventional. But that just goes to show the flexibility of permanent coverage, as it can help you in many scenarios, such as giving your kids a helping hand in life. 

### **Treat yourself to that convertible** 

Or, you know, you could just use the cash accumulation to buy yourself something nice during your older years – like that convertible you’ve always had your eye on. We’re sure the kids can work out the college planning for themselves. You deserve the treat. 

### **Access the benefits of riders**

You also have the option to add riders to your permanent life insurance policy, which allows you to customize your coverage. [A life insurance rider can extend the benefits](https://www.beamplify.com/blog/life-insurance-riders-explained) of your perm policy with options like accelerated death benefits, which give you access to finances before you pass should you fall seriously ill or are unable to work due to injury. 

Another option is the long-term care rider. As we begin to live longer, sometimes there can be a shortage of access to care later in life–especially if your spouse isn’t around. A long-term care rider, however, solves this issue by giving you access to professional care later in your life should you need it. 

**Other popular riders include:**

- Waiver of premium
- Guaranteed insurability rider
- Child term rider
- Return of premium rider

Essentially, you’ve got plenty of choice when it comes to extending the benefits of your life insurance policy if you decide you’d like more options included in your coverage. 

### **Locked-in premiums**

Permanent life insurance is pretty easy to follow, in that you only pay one premium each month that never increases. So if you can afford it when you first get a policy, there’s every chance that you’ll be able to afford it 30 years later. 

A premium that never changes means you know exactly what comes out of your account each month, and you don’t need to worry about increasing premiums or your payments changing over time.

### **Let’s talk about the death benefit**

Death might not be something anyone likes talking about, but being prepared can make a huge difference to the people you leave behind. It doesn’t mean you need to spend every waking minute thinking about it, though. 

With a permanent life insurance policy, you get tons of benefits while you’re still alive. But you also get the security of a death benefit, which grows as you pay into the premium each month. So you can happily pay into your premium without worrying about what might happen, as you’re covered for the good and the bad. 

A death benefit can also protect your business as it [provides benefits if you’re a business owner.](https://www.beamplify.com/blog/thinking-about-starting-your-own-business-heres-what-you-need-to-know) You can protect your employees and ensure everything keeps running. Most importantly, it allows you to leave a legacy and give the people you love and care about financial protection.

### **​In conclusion: how to use life insurance benefits** 

There are plenty of benefits that come with a permanent life insurance policy, and you can use them in a variety of ways. The main thing is that you have options and use permanent life insurance benefits to enjoy a better quality of life and cover yourself for every angle. 


Some of the Ways You Can Use Permanent Life Insurance Benefits

Learn how to build wealth with permanent life insurance. It's a unique and often safer approach. 

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If you’ve ever thought about getting life insurance, there’s every chance it’s because you want to leave a nest egg to your loved ones when you pass. What many people don’t know, however, is that the death benefit is just one element of life insurance. It can also be a type of savings account, letting you build wealth throughout the years while you’re alive. How? That’s what we’re here to tell you with this guide on how to build wealth with permanent life insurance. 

### **Permanent policies: life insurance, but different**

Most of us think about life insurance as something you get to protect the people you love in the event of your death. One perception of life insurance is that it’s for people who have recently had kids. And while that is true to some extent, it’s only one aspect of life insurance. 

When you factor in a permanent policy, the entire dynamic changes. It becomes something you should seriously consider if you're in your [twenties](https://www.beamplify.com/blog/should-i-get-life-insurance-in-my-20s), [thirties](https://www.beamplify.com/blog/heres-what-you-need-to-know-about-millennial-life-insurance), forties, or even a [senior](https://www.beamplify.com/blog/permanent-life-insurance-for-seniors-it-makes-sense-we-promise). That's because it allows you to build wealth through something called cash value.

What's the cash value? We'll cover that in a bit. But what you need to know right now is that a permanent life insurance policy acts as a form of a savings account while also growing the death benefit. As a result, it looks after you and your family, both in life and death. 

### **How does permanent life insurance let you build wealth?**

Ah, yes–the cash-value aspect. With a [permanent policy](https://www.beamplify.com/blog/who-needs-permanent-life-insurance-the-answer-might-surprise-you), you pay into two pots: the death benefit and cash value. The former grows your death benefit with each monthly payment, but it’s the latter that helps you build wealth. 

With the [cash-value aspect](https://www.beamplify.com/product/cash-accumulation), you can grow your wealth each month and build savings over the years. Then, when you want to tap into the money you’ve accumulated, you can do so by withdrawing it–while you’re still alive. 

The average permanent life insurance policy allows you to grow your cash value by 6-8% annually. That’s pretty significant compared to the standard 0.1% in a typical savings account. So you’re getting more growth and even more money to play around with later in life. 

### **What does that mean for you?**

It means all the good news. No, but really, it's easy to underestimate how much you can save with a permanent life insurance policy. On top of that, [it's a safer bet than other investment types](https://www.beamplify.com/blog/what-are-the-different-investment-types) like stocks and bonds, which can suffer from market volatility.

There are also tax benefits with a permanent life insurance policy (more on that shortly) than traditional 401(k)s.  Essentially, using a perm policy as a savings account can set you up well later in life. 

You might want to use the money you build [to pay for your kid’s college](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning), or maybe you just fancy buying that sports car you’ve had your eyes on. The choice is yours, thanks to the money you would have built with a permanent policy. 

### **Other benefits of permanent life insurance**

So permanent life insurance is great for building wealth, which is a game-changer. But it has other benefits, too. It's pretty all-encompassing and acts as a valuable investment when you take into account what else it's capable of. 

**Tax-free**

Whatever you save with your life insurance, [you do so tax-free](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). That's right; you don't pay a penny to the taxman. One of the ways you can access your cash value is by taking out a loan against yourself at 0%. And because you can't pay tax to yourself, the money accessed is entirely tax-free. After you pass, the loan is repaid via the death benefit. However, because the death benefit has also grown in this time, you'll still have something to leave to your loved ones.

**Customizable riders**

[You can add riders to your permanent life insurance policy](https://www.beamplify.com/blog/life-insurance-riders-explained), customizing it to suit your needs in the process. Some of these riders cost extra; others are offered free. A popular rider is long-term care, which provides assistance to you later in life if you don't have a family to look after you. Another option is accelerated death benefit, which allows you to tap into the resources of a policy if you fall sick or are injured and unable to work.

**Locked-in premiums** 

A permanent policy is more expensive than the other life insurance options on the market, with higher premiums, meaning you pay more. At first, this might seem like a negative. But dig a little deeper, and permanent life insurance suddenly looks like the better investment. With a perm policy, you pay the same amount at 35 as you would 55–the premium never increases. With other life insurance options, you might pay a lower premium, but it goes up if you want to renew once the policy expires. A perm policy doesn't expire, so you don't have the same problem.

### **Are there other options?** 

**Variable life insurance** 

A different type of permanent life insurance, variable universal life has a built-in savings component that is low cost but offers high growth investment options. You even have the flexibility to access funds at any time and tap into the wealth you’ve built. 

Variable universal life insurance works by having investment subaccounts where you can benefit from cash value. It works in a similar way to a mutual fund, with exposure to specific market fluctuations able to generate significant returns. 

A VUL policy offers increased flexibility and growth over the traditional cash value element found with a life insurance policy. There’s also the added benefit of having money to protect your family and help with the challenges they would face if you passed away. 

**Term life insurance** 

You can opt for a [term life insurance policy](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question) instead of a permanent one. It’s generally the cheaper option but doesn’t have anywhere near as many of the benefits. Unlike permanent life insurance, a term policy only covers you for a set period of time, usually between 5 and 30 years. 

Once the length has expired, you will no longer be insured. Of course, you can extend your policy, but you will be charged premiums at the new renewal rate. For example, if you took your initial policy out at 25 and renewed it at 55, you'll pay for life insurance as a 55-year-old. That means a higher premium. 

The other option is [group life insurance through your employer](https://www.beamplify.com/blog/is-life-insurance-from-your-employer-good-enough). This can be a handy bonus, but you might want to consider an individual policy too. Group life insurance is typically capped at $50,000, and you can only use your employer's preferred provider. If you leave the job, you will also lose your group life insurance.

### **In conclusion: a wealth builder you can’t ignore**

The game changes when you look at life insurance through the prism of a permanent policy. Suddenly, you’ve got an excellent combination of a death benefit and the ability to build wealth with permanent life insurance. With tax-free cash accumulation, you can explore perm policies while thinking about the future and not just what happens when you pass away. That’s enough of a reason to get excited about permanent life insurance if you ask us. 


How to Build Wealth With Permanent Life Insurance

The cost of permanent life insurance is determined by many variables but what are its benefits? Our guide shows all. 

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Permanent life insurance is often seen as a more expensive alternative to term life insurance. But what many people don’t realize is that it can act as an investment tool as well as financial protection when you die. Therefore, the overall cost of permanent life insurance can be more beneficial than term because you grow cash accumulation in the long term.

### **In this guide, we’re finding out the cost of permanent life insurance so you can decide if it’s the right coverage for you:**

**Paid the cost to be the boss**

Sometimes things can seem more expensive than they really are. That’s because you need to look at the overall picture [when making a purchase or investing money](https://beamplify.com/blog/what-are-the-different-investment-types). Something that initially comes across as cheaper might seem like a good deal at the time but turns out to be the complete opposite.

Term life insurance is a bit like that. A term policy is typically the cheapest form of life insurance, but it can end up feeling more costly. Permanent life insurance, however, is more expensive upfront but comes with long-term financial benefits.

### **Permanent vs. term coverage**

**Term**

If you were to look at the prices of term and [permanent life insurance](https://www.beamplify.com/blog/are-permanent-life-insurance-policies-worth-it) policies side by side without any context, then it would be a no-brainer. Term life insurance has cheaper policies than permanent. Therefore, your monthly outgoings will be cheaper with term coverage.

That doesn’t tell the whole story, however. Context is needed when you measure the two. Term insurance covers you for a specific term (the giveaway is in the name, right?), which is usually between 10, 20, and 30 years.

That’s it, though. There are no benefits once your coverage finishes unless you die and your loved ones get a death benefit, though that’s not really something to celebrate. And if you want to renew, you’ll pay for a new policy based on your current age, which means the cost of your premium goes up.

There are no bells and whistles with a term policy. Just coverage for a set amount of time, and then it’s finished.

**Permanent**

Permanent life insurance, on the other hand, has plenty of bells and lots of whistles. Yes, the premium is initially more expensive, but you’re locked in from the minute you sign up–and it lasts for as long as you keep paying into the policy. That means that you will still be paying the same premium 10, 20, or 30 years down the line.

On top of that, your coverage is accumulating a cash value. When you make payments into your policy, part of each payment [goes into a savings vehicle called “cash value"](https://www.beamplify.com/blog/is-permanent-life-insurance-a-good-investment). This accrues over time and can be accessed tax-free when you’d like to use it.

How does that work, you ask? The cash grows on top of the original coverage amount purchased, so your death benefit is growing alongside the cash value. Even if you took out all of the cash accumulated, you’d still have a healthy death benefit that would be passed onto your beneficiaries after you die.

### **Types of permanent life insurance**

Before we get into the specifics of costs, it’s important to know that permanent life insurance comes with more than one option. There are typically three types of coverage that you can get.

**Whole life insurance**

A whole life policy offers fixed-rate coverage and is the most basic type of permanent life insurance. It comes with a death benefit, as well as a cash value that grows over time that’s dependent on the premium paid in.

**Universal life insurance**

If you’re looking for a cheaper perm policy, then a universal index may be for you. It’s a policy offering a type of permanent life insurance with a savings arm for its cash value. That means you can pay more than the premium due, which will [go into a savings account that is gross tax-free](https://www.beamplify.com/blog/is-permanent-life-insurance-tax-deductible). You also have a stop payment option should you wish to freeze the payment if you fall on hard times. Premiums on a universal life insurance plan are offered at a fixed rate or variable.

**Indexed universal life insurance**

Ok, this is where things get a bit more complicated. An indexed universal policy (otherwise known as IUL) allows you to allocate cash value amounts to either a fixed account or an equity index account, such as an [S&P 500](https://www.investopedia.com/terms/s/sp500.asp). IULs offer tax-free cash accumulation for retirement while providing a death benefit. They also have a cap on both ends of the index. So, let’s say the stock market drops, the majority of IUL policies won’t allow the index fund to go into negative as it caps it at zero percent. But if the stock does the opposite and rises by, let’s say, 30 percent, your policy will be capped at a specific number.

**Ride with me**

There are also life insurance riders that can change the cost of permanent life insurance. A rider is a policy extra that improves the policy but comes with an added cost. These can include:

*   Accelerated death benefit
*   Accidental death benefit
*   Critical illness rider
*   Guaranteed insurability rider
*   Long-term care rider
*   Waiver of premium rider

The cost of permanent life insurance ultimately comes down to the type of cover you get, plus any riders you add to the coverage. Therefore, calculating the exact price isn’t easy, as it varies considerably.

### **What is the cost of permanent life insurance?**

We’ve arrived at the big question, but asking the cost of permanent life insurance is a bit like determining the length of a piece of string. Calculating the cost of permanent life insurance isn’t easy because there are so many variables that go into it. Age, health, type of policy, and coverage amount all play a role.

For example, a 30-year-old person getting $50,000 worth of coverage can expect to pay considerably less than a person in their late forties taking out a policy. There is also a discrepancy in sexes, as women tend to pay lower rates than men because they aren’t as high of a risk.

Essentially, it comes down to the variables when you’re getting a permanent life insurance policy. A healthy young female is going to pay more than an unhealthy older male. That’s pretty much how it is with any policy, be it permanent, term, or health insurance.

So if you’re thinking of getting a permanent life insurance policy, it’s worth having an understanding of everything insurers take into account:

*   Age
*   Gender
*   Your general health
*   If you’re a smoker
*   Lifestyle
*   Family medical history
*   Occupation and hobbies
*   Policy benefit amount
*   Medical exam results

Let’s say you’re a 30-year-old female who is in good health, doesn’t smoke, and decides to take out whole life insurance for $150,000. In that scenario, you can expect to pay an average of $100 per month or $1,200 per year. Of course, these are just averages, and the best way to get an estimate is by using the widget below or [getting a quote here](https://quotes.beamplify.com/basic).

```plaintext
<iframe style="border: none; margin: 0px auto; display: block;" xml="lang" src="https://beamplify.com/embed/amplifyWidget54363?utm_source=AmplifyBlog;utm_origin=Life_Insurance_Costs_Blog" width="800" height="500" scrolling="no" data-service="beamplify"></iframe>
```

### **In conclusion: the cost of permanent life insurance**

Many variables go into the cost of permanent life insurance, but it’s important to remember that it offers so much more than just a death benefit. With a permanent policy, you can build cash value over time and access it while you’re still alive. Essentially, you’ve got all angles covered financially, both in life and in death.

What Is The Cost Of Permanent Life Insurance?

Life insurance for single people has many benefits such as the ability to build wealth tax-free.

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If you don’t think life insurance as a single person is necessary, it could be time to change your tune. Life insurance for single people has many benefits, including the ability to build wealth. In this guide, we’ve got all the details you need about getting a life insurance policy if you’re single. So read on and find out about the type of coverage that could be just right for you. 

### **Do I need life insurance if I’m single?** 

Single people without a partner or children often feel that life insurance doesn’t apply to them. No one relies on your income, so why pay into a premium every month when there isn’t someone who could act as the beneficiary?  

Yet, it’s not quite that simple, and there are some reasons why you might benefit from a life insurance policy. From covering the costs of your funeral if you passed away to building wealth when you’re alive, life insurance has more strings to its bow than a death benefit for your loved ones. 

Below, we’ve listed particular scenarios where life insurance for single people could be hugely beneficial and help safeguard your future. Whether you’re single or not, [young](https://www.beamplify.com/blog/should-i-get-life-insurance-in-my-20s) or [old](https://www.beamplify.com/blog/permanent-life-insurance-for-seniors-it-makes-sense-we-promise), there’s likely to be a good reason for getting life insurance. 

### **Scenarios where life insurance for single people is beneficial** 

**1. You want to build wealth**

Life insurance doesn’t need to be all about cosigns, business partners, and dependents. With a [permanent policy](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance), you can also build wealth while you’re still alive, effectively using it as a form of a savings account. That’s because permanent life insurance has a [cash-value aspect](https://www.beamplify.com/product/cash-accumulation) that allows you to grow your money. When you pay into the premiums, you cover the death benefit and cash value. Both grow each month, and you can access the cash value later down the line and use it for pretty much whatever you want.

**2. You want flexible savings to use for the future**

Permanent life insurance has options where you can either save in a [high-interest savings account (IUL) or high growth investment account (VUL)](https://beamplify.com/blog/can-i-use-permanent-life-insurance-as-an-asset-class-heres-what-you-need-to-know), that you can access whenever and for whatever you like either right away, or after a vesting period of 10 years, all tax-free. Investment properties? Remodeling the house? Dream vacation? You name it. Now you have a tax-free fund just for you.

**3. You want to protect your own income in illness or injury**

It’s especially important to protect ourselves when we’re single because let’s face it, who else is going to cover our backs but us? You can use permanent life insurance to protect yourself in illness or injury by accessing a large coverage amount if you suffer an unexpected illness or injury, or for later in life when the [chances of us needing long-term care or contracting a critical illness are over 70%](https://www.morningstar.com/articles/1013929/100-must-know-statistics-about-long-term-care-pandemic-edition). That means that if anything hits the fan in your health, you won’t have to worry about bills, food on the table, and out-of-pocket care no income is coming in.

**4. If you have debts**

Americans owe a lot of student debt. Like, a lot. It’s even possible that your student debt could be as high as six figures, depending on where you went to college and what you studied. But who’s paying the loans if something happened to you? This is especially true if you have private student loans, with debts unlikely to be forgiven if you pass away. With a life insurance policy, your parents (or other guardians) wouldn’t need to front the cost if you left them with a high amount of student loans. It’s an affordable solution that won’t leave them out of pocket. 

Talking of debts, what happens if you pass away and leave debt to other family members? Most of us have some form of car loan or credit that we owe, and if you have a cosigner listed, then they’ll need to front the costs if you’re no longer around. Again, this is where a life insurance policy comes in handy–it can be used to pay off your debts, so no one is left picking up your bill. 

Another cosign conundrum here, [as you may have a mortgage](https://www.beamplify.com/blog/rent-vs-buying-whats-the-big-difference) with a parent or sibling. Should the worst happen, the sums involved with a mortgage are vast, and the last thing you want to do is burden one person with such high payments. Therefore, getting a life insurance policy can safeguard the person you share the mortgage with and help them continue living in the property, as the payments will be covered by your death benefit. 

**5. You have financial dependents who aren’t your children**

Being single doesn’t necessarily mean you don’t have dependents. You might provide financial aid to your aging parents or maybe even your grandparents, with them relying on you to help out. If the worst happens, suddenly, those who depend on you could find themselves facing financial difficulties. However, if you name them as the beneficiary on your life insurance policy, they can receive the death benefit, so at least they won’t have to worry about their financial aid being disrupted. 

**6. You have business partners**

More people are [running their own business these days](https://www.beamplify.com/blog/thinking-about-starting-your-own-business-heres-what-you-need-to-know), some alone, others with a business partner. It might be worth looking into a life insurance policy, as it could be required to get a business loan. On top of that, having life insurance coverage could protect the business if something terrible happened to you. Without it, your business partner would likely become liable to pay all the debts, which could put a strain on operations. With life insurance, though, your partner can carry on running the business with the help of the death benefit. 

**7. What about when you do meet that special someone?**

You might be single now, but who knows what the future holds. Instead of waiting until you meet someone to start a family with, why not take out life insurance now? If it’s a perm policy, it means you can grow the cash value and put yourself in a more favorable position by the time you do have a family, as opposed to starting from scratch when your kids are born. 

**8. Which type of life insurance should I get?**

**Term**

A [term life insurance policy](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question) lasts for a specific amount of time, usually anywhere between 5 and 30 years. If you only want limited coverage–say, to cover your mortgage payments–a term policy could be useful. It’s the cheapest form of life insurance and essentially covers your named beneficiary should you pass away. However, once the policy expires, that’s it–there are no added benefits. Plus, if you wish to extend the policy, you will be charged at your renewal age, which means it will most likely cost more as you’re older.

**Permanent** 

A [permanent life policy](https://www.beamplify.com/blog/is-permanent-life-insurance-a-good-investment) has more expensive premiums compared to term, but it’s arguably more value for money too. We’ve already touched on the cash-value aspect, which allows you to build wealth while you’re still alive. Even better, unlike other savings accounts, the [money you accrue is tax-free](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). When you withdraw the cash value, you can do so as a 0% loan against yourself. Because you can’t pay tax to yourself, the money you take is completely tax-free. When you pass, the death benefit pays back the loan, with what’s leftover going to your named beneficiary. 

### **In conclusion: life insurance for single people**

You don’t need a family to benefit from life insurance, especially if you’re getting a permanent policy. Life insurance for single people can be a great way to build savings and set yourself up later on in life while also giving you the added bonus of a death benefit to leave to the people you care about the most. 



Life Insurance for Single People: Why You Need It

Marriage has a lot of new changes but learning how to do finances when married has to be one of the most impactful. 

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You both said “I do” at the altar, and the honeymoon to Bora Bora was divine, but now it’s time to settle into married life and everything it entails. Couples nights, finishing each other’s sentences, and finances. Ahh, yes–the other F word. 

This can go one of two ways: you both have an understanding about finances and build a financially secure future together, or there’s a lack of transparency over money, and it all becomes a bit of a mess. 

Hopefully, it’ll be the former, and with our guide on how to do finances when married, you can enjoy your life together as newlyweds and beyond while running a tight–but fun–financial ship. 

### **How to do finances when married**

**Split the bills… or don’t**

Most couples assume they should split the bills when once hitched–and if everyone’s happy with such a scenario, then it’s all good. Splitting everything 50/50 down the middle means you know where you stand, and it’s all equal. It’s not the only option, however. 

If one partner earns significantly more than the other, there’s no reason why the higher earner can’t pay slightly more–if it works for all involved. The conversations about bills could be your first true test when it comes to how to do finances when married. 

So if you want to pass with flying colors, open a dialogue about what works best. It could be that you split the rent or mortgage right between you, but the spouse who earns more pays a little bit extra for outgoings like utilities. 

**Open a joint checking account**

Are you really married until you’ve opened a joint checking account? We’re not saying that you should share every dime, but if you’re building towards the future, you’ll want to establish joint accounts where you share funds. 

Start with a checking account, and combine an element of your finances. It could be for emergencies or something relatively simple like paying for the groceries. Having a joint account will help teach you how to manage finance together and put you on a sound footing for other joint money activities, such as...  

**And a joint savings account** 

If you’re opening a checking account together, you might as well look into a joint savings account too. They can be beneficial if you’re planning to manage finances and work towards [achieving your money goals together](https://www.beamplify.com/blog/10-financial-strategies-to-reach-your-money-goals). 

Joint savings accounts can provide better financial protection, thanks to the Federal Deposit Insurance Corporation insuring against a higher amount for joint accounts compared to individual ones. For example, the FDIC will insure a joint account for $500,000 and $250,000 for a single account.

**But also have your separate accounts**

Sharing is caring and all, but it’s good to have your own identity–especially with your finances. That’s why it might be a good idea to share some aspects of your money but leave others to yourself. 

Having separate accounts doesn’t mean you don’t trust your spouse to share money. Plus, you can continue managing your money independently and enjoy a form of financial independence. If you’re the more frugal one, for example, you can relax safe in the knowledge that you’re managing your money how you like. 

On the other hand, if you like spending your money, you can always agree on a joint monthly amount to put aside for the savings account. Then you get the freedom of spending (responsibly, of course) in a way that suits you with your solo account. 

Trust is a fundamental part of being married, and having that faith in each other to manage your own finances can help make the relationship even more secure. Sometimes, it’s great to do things together. But some things can also be done apart, which brings us to...

### **Get a life insurance policy**

Why not protect the ones you love by making sure they aren’t left with financial issues if you unexpectedly pass away? Plus, if you [get a permanent life insurance policy](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance), you don’t have to think about death as there are benefits while you’re still alive (more on that in a bit).

But which spouse should get life insurance? [You could look at a joint policy](https://beamplify.com/blog/everything-you-need-to-know-about-joint-life-insurance), but it may be easier going for two single ones, as they’re more customizable and offer greater control for the policyholder. And if you’re thinking of starting a family–or have one already–permanent life insurance coverage offers protection for the entire crew. 

**Cash value for perm life insurance**

With a perm policy, you can build wealth thanks to the [cash-value element](https://www.beamplify.com/product/cash-accumulation). When you pay into your premium, you’re effectively covering two areas: cash value and the death benefit. Both of these grow over time, and you can access the cash you’ve accrued while you’re still alive and use it how you see fit. You may even decide to [pay for the kid’s college](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning) with your cash accumulation. 

**Tax-free savings and investments**

What’s better than growing wealth through your life insurance policy? [Doing it tax-free](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings), that’s what. When you access the cash value in your policy, you can do so via a 0% loan to yourself, and because you can’t pay yourself tax, you get to take the money out tax-free. Then, when you pass away, your increased death benefit pays the loan off, with the rest going to your beneficiaries. 

**The same premium for your entire life** 

A permanent life insurance policy also locks in your premiums, so you pay the same monthly figure at 35 as you would 55. And while it may be more expensive than a term policy in the short term, [in the long run it’s more valuable](https://www.beamplify.com/blog/life-insurance-costs-why-its-cheaper-than-you-think) because your premium doesn’t change. Whereas a term policy will charge you renewal prices at the age you renew if you decide to extend it. 

**Start your marriage off by adulting like the rich**

Look, you’re married now–it’s time to be an adult and do grown-up things like brunch. But if you’re [going to be an adult, you might as well do it like the rich](https://www.beamplify.com/blog/how-to-adult-like-the-rich). What do we mean by that? Build your wealth together and protect your financial future, that’s what. 

A permanent life insurance policy is a good place to start, as it gives you benefits in both life and death. You can also make other smart investments if you build your wealth, such as investing in real estate and even stocks if you [want to try other investment types](https://www.beamplify.com/blog/what-are-the-different-investment-types). It’s all about long-term thinking. Do that, and you’ve got a good chance of building wealth together. 

### **In conclusion: How to do finances when married** 

Getting your finances right as a married couple can be tricky, but it doesn’t need to be stressful. Transparency and research will go a long way to setting you, your spouse, and the rest of your family up for the future. And the “I do” you said at the altar will be the beginning of a long relationship with financial security. Now that’s how you do finances when married. 

The Newlywed Game: How to Do Finances When Married

Life insurance with pre-existing conditions tends to be harder to get but it's not impossible to build a policy that works for you. 

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A pre-existing condition is something you have that’s medically related and was an issue before you decided to enquire about a life insurance policy. Some pre-existing conditions are more severe than others, though they can all affect a potential life insurance policy in some capacity.

What constitutes a pre-existing condition?

The short answer is yes, you absolutely can get life insurance with a pre-existing condition. However, the overall picture is more complex, and much of your eligibility comes down to the type of condition you have, its current status, and other aspects, such as your age and lifestyle. It really comes down to the type of pre-existing condition you have, and you might need to pay higher premiums or undertake additional tests before getting insured.

Can I be approved for life insurance with a pre-existing condition?

When applying for a life insurance policy, the provider will most likely look at your current health status as well as the medical history in your family. Factors taken into consideration will include the type of condition you have, its severity, and the life expectancy involved with the condition.

Which medical conditions mostly affect life insurance?

Tailored life insurance policy, Group life, Term life insurance, Permanent life insurance, or Accidental death and dismemberment insurance

What’s the best type of life insurance for a pre-existing condition?

Getting life insurance is pretty straightforward if you’re the right age and in good health. But it might not be quite as simple if you have a pre-existing health condition. You may even wonder if you’re eligible for life insurance at all.

In this guide, we’re covering everything you need to know about life insurance policies when you already have a medical condition. So read on and find out if you can still get covered.

### **What constitutes a pre-existing condition?**

A pre-existing condition is something you have that’s medically related and was an issue before you decided to enquire about a life insurance policy. Some pre-existing conditions are more severe than others, though they can all affect a potential life insurance policy in some capacity.

\*\*Generally speaking, the following pre-existing conditions may raise concerns with life insurance providers: \*\*

*   Asthma
*   Obesity
*   Cancer
*   Heart disease
*   Diabetes
*   HIV/AIDS
*   Epilepsy
*   High cholesterol
*   Gastroesophageal reflux disease, or GERD

Insurers all have their underwriting process, so it’s not one rule that fits all. However, they may align on many topics. Therefore, it’s best to check the terms and conditions with each provider and their stance on pre-existing conditions before you go about getting a policy.

### **Can I be approved for life insurance with a pre-existing condition?**

The short answer is yes, you absolutely can get life insurance with a pre-existing condition. However, the overall picture is more complex, and much of your eligibility comes down to the type of condition you have, its current status, and other aspects, such as your age and lifestyle.

Life insurance providers are continually looking at the risk factor involved, so they’ll take all factors into account. It really comes down to the type of pre-existing condition you have, and you might need to pay higher premiums or undertake additional tests before getting insured.

**Which medical conditions mostly affect life insurance?**

When applying for a life insurance policy, the provider will most likely look at your current health status as well as the medical history in your family. Factors taken into consideration will include the type of condition you have, its severity, and the life expectancy involved with the condition.

So if you suffer from mild GERD or have arthritis, it’s unlikely you will face as many roadblocks to getting life insurance as you would if you had heart disease. Your current health condition also plays a role–if it’s under control and you’re in good health, you’re more likely to qualify for coverage.

**Other key elements factored in by most insurers include:**

*   The length of time since your diagnosis
*   Risk of complications
*   Age and lifestyle
*   Potential to undergo a medical exam

As each of the above increases, the higher the chance that you’ll need to pay a more expensive premium. In the worst-case scenario, you might not even be able to get a policy–or you’ll be restricted to what you can get (more on that shortly). However, the lower the risk, the lower the policy.

### **What’s the best type of life insurance for a pre-existing condition?**

We’ve established that a pre-existing condition doesn’t mean you won’t automatically be turned down for a policy. With that in mind, it’s worth exploring the best option for you if you currently have a medical condition that could affect your ability to get coverage.

**Tailored life insurance policy**

Some insurers might not be able to give you access to their basic policies but are happy to tailor unique coverage if you have a pre-existing condition. After applying for a standard policy, they will likely get in touch to discuss bespoke options if necessary.

**Group life**

Even if you’ve got pre-existing health problems, you may be able to get [group life insurance through your employer](https://www.beamplify.com/blog/is-life-insurance-from-your-employer-good-enough). It won’t be as thorough as an individual policy, but you should get some form of coverage–and it’s unlikely you’ll need to take a medical exam.

**Term life insurance**

The most cost-effective–but also limited–type of coverage, [term life insurance](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question) lasts for a set period of time–typically anywhere between 5-30 years. You can lock in your protection for a set time and may qualify for a policy if your pre-existing condition is under control. Once the term ends, you will no longer be covered for life insurance and will need to renew at your age when the term ends.

**Permanent life insurance**

Unlike term, a [permanent policy](https://www.beamplify.com/blog/are-permanent-life-insurance-policies-worth-it) doesn’t expire. It’s typically more expensive than term options, but the premiums stay the same the entire time, so there’s a good argument that it’s more valuable in the long run. A perm policy also gives you benefits while you’re still alive, such as wealth accumulation through its [cash value element](https://www.beamplify.com/product/cash-accumulation) that also happens to be [tax-free](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). With a perm policy, you pay into two pots: the death benefit and cash value. Both grow over time, and you can dip into the cash-value aspect while you’re still alive and use it on anything you want. This could be a good policy to consider if you have a pre-existing condition to have some cash to draw from in the event of an emergency or if you are severely ill, you may be able to take your death benefit out early. Like a term policy, the status of your pre-existing condition plays a role in whether or not you’re eligible for permanent coverage.

**Accidental death and dismemberment insurance**

If in the worst-case scenario, you don’t qualify for a term or permanent policy, you can explore going down the route of accidental death and dismemberment insurance. Headline-grabbing name aside, this type of coverage pays out in the event of accidental death. That means your medical history doesn’t come into play unless your pre-existing condition contributed to your accidental death.

**What can I expect during the application process?**

Again, the exact process you’ll go through depends on the provider. But there are some basic expectations during the application process for applicants getting life insurance with a pre-existing condition:

*   Get a quote – without one, you’ll have no idea about how much you need to pay for a life insurance policy. You can use an [online tool for a quote](https://quotes.beamplify.com/basic) or call the life insurance company directly.
*   Get your information ready – be prepared with things like your driver’s license number, SSN, primary care physician, and medications information. If you’re signing up family members you should have their information as well.
*   Fill out the application – you’ll likely need to speak briefly with a life insurance agent over a 5-10min call to answer some health and lifestyle-related information. This is where you will need to disclose your pre-existing condition.
*   Medical exam – the insurer may want to carry out a medical exam. If this is the case, they will be in touch to arrange a time. The exam usually takes around 30 minutes, though there may be [some restrictions in place due to Covid](https://www.beamplify.com/blog/life-insurance-during-covid-the-impact-of-the-pandemic). However, you can also choose from non-med options if a medical exam is inconvenient for you.

Lastly, the underwriter will collate all the information and make an informed decision about whether or not you qualify for life insurance and the premium on offer. If you can get coverage and are happy with the details, all that’s left to do is sign the policy and start paying your premiums.

### **In conclusion: Life insurance with a pre-existing condition**

Getting life insurance with a pre-existing condition can be harder than if you’re completely healthy, but it is still possible. You don’t need to be left frustrated and may be able to find life insurance that’s right for you, even if your health isn’t in tip-top shape at the time of getting coverage. The most important thing is to get it as early and as young as possible so you get the best rates possible and the most likely chance to get approved.

Can I Get Life Insurance With a Pre-Existing Condition?

Joint life insurance is one of many life insurance options for couples and families but is it always the right one? 

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Most people think about single life insurance policies when it comes to getting coverage, but it’s not the only option on the table. Joint life insurance is there for couples who want to get a policy that covers them both at the same time. But is it the best option? In this guide, we’re exploring joint life insurance and if it’s the right move for you and your partner. 

### **What is a joint life insurance policy?**

The name probably gives it away, but a joint life insurance policy is designed to cover two people instead of one. In theory, that makes it ideal if you’re a couple who would like coverage that looks after both of you simultaneously. 

Joint life insurance is similar to [permanent life insurance](https://www.beamplify.com/blog/who-needs-permanent-life-insurance-the-answer-might-surprise-you) in that it stays in effect as long as you pay into the premiums. Also, like perm coverage, it can build [cash value](https://www.beamplify.com/product/cash-accumulation) that grows completely tax-free–but that depends on how you structure your joint policy.

The comparisons with permanent life insurance don’t end there, either. You can also [customize your plan with riders](https://www.beamplify.com/blog/life-insurance-riders-explained) allowing you to shape the joint policy in a way that fits you and the person you’re getting the policy with. 

**How is it different from single life insurance?**

The obvious place to start is with the people covered. Single life insurance covers one person, with the death benefit going to the beneficiary named on the policy. If you’re part of a couple but only one of you has life insurance and the non-insured person dies, then it’s essentially like no one had life insurance. The death benefit would only come into effect if something happened to the person with coverage. 

With a joint policy, however, both people are covered. So if one person passed away, the rest of the family would still receive the death benefit. Joint policyholders also don’t need to be married, so you can get coverage with a spouse or domestic partner. 

Joint life insurance isn’t as common as a single policy, so it can be harder to find. You’re also unlikely to [find term joint life insurance](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question), which means that most of the policies on offer come as permanent coverage. 

### **Why should you consider joint life insurance?** 

If you’re a couple with children, a joint policy could make sense as it protects both of you at the same time. If something happened to your other half, but you survived, you would still be eligible for the death benefit because it’s a joint policy–though there are technicalities in how that works. For example, you have two primary options when taking out a joint policy: first-to-die life insurance and second-to-die life insurance.

**First-to-die**

A first-to-die policy kicks in after the, you guessed it, the first person dies. The surviving spouse is typically named as the beneficiary and will receive the payout if their partner dies. Many opt for this type of joint life insurance coverage because it can help the spouse maintain their way of life without their partner.  With this policy, however, the coverage stops short with the death of the first spouse. If the partner wanted to continue life insurance protection, they would need to get a single policy. 

**Second-to-die**

Also known as survivorship life insurance, second-to-die only pays out when both partners pass away. Therefore, it doesn’t act as an income replacement and won’t help with things like mortgages and other debts. However, it does help with factors like offering liquidity to pay estate and inheritance taxes or as an asset to generate income for surviving dependents. 

**Does joint life insurance have any drawbacks?**

The surviving partner will need to take out a new policy on first-to-die if they want their life insurance coverage to continue. However, should the joint policy come into effect 15 years after you initially took it out, you will be charged at your new age and therefore need to pay a higher premium. 

Of course, you don’t need to worry about such a scenario with the second-to-die policy, but the death benefit isn’t released until you’ve both passed away. Premiums can also be more expensive for both of you if one partner has pre-existing health issues. 

Lastly, a joint policy could cause issues should you and your spouse separate. Some joint policies don’t allow for the coverage to split into two individual policies, so things could become somewhat awkward should you and your spouse split up. 

**The benefits of getting a single policy**

There is always the option of two single policies. Yes, single policies tend to be more expensive, but they give the policyholder more control over every aspect of the coverage. With a permanent policy, you can both grow your wealth with the cash value element while ensuring there is a death benefit to leave to your children–or whoever you wish for it to go to. 

Plus, you get the benefit of accessing your wealth later in life [tax-free from two separate policies](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings), so there are no issues if you break up–and you can potentially build more wealth on two individual policies if you stay together.

### **In conclusion: joint or single?** 

A joint policy will work for plenty of couples, but it’s worth exploring all of the available options before making a final decision. You may find that two single policies work better for both of you and your family. You’ll have more control over the policy and can still make sure your beneficiaries are well looked after in the event of your death. There are some things couples should do apart, and a life insurance policy might just be one of them. 

Either way, take a look at [personal quotes for yourself](https://quotes.beamplify.com/basic) and find out what your options are.


Everything You Need to Know About joint Life Insurance

Discover how to use life insurance for financial protection, specifically how it can help grow wealth tax-free.

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Life insurance covers your loved ones in death, but it can also be beneficial while you’re still alive. In fact, a life insurance policy can act as a step to financial protection for you and your family. How? Here, we’ve got all the details about why you should get life insurance for financial protection. 

### **Building wealth with a permanent policy**

Your first step to financial protection with life insurance comes with [permanent coverage](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance). Unlike a [term option](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question), which only lasts for a specific amount of time, perm coverage never expires, and you pay the same premium throughout the entirety of the policy. 

There’s also the added bonus of wealth accumulation, which changes the entire dynamic of life insurance and really helps you on your way to financial protection. So, how does it work? 

With a perm policy, you pay into two pots: cash value and death benefit. The [cash-value element](https://www.beamplify.com/product/cash-accumulation) grows each time you pay into the policy and can be accessed later in life. Think of it as a savings account, and you’re not far off. Even better, the cash value in a life insurance policy typically grows by between 6% and 8%, meaning you can enjoy gains and give yourself a nice financial boost while also benefiting from a death benefit should the worst happen.

**Life insurance protects your family** 

If you’re the primary breadwinner in the house and people rely on you to provide, what happens if you’re no longer around? A life insurance policy safeguards your family against financial trouble should you pass away.

The death benefit goes to your spouse and can pay for important things like the mortgage, debts, and general day-to-day living. With a [permanent policy](https://www.beamplify.com/blog/are-permanent-life-insurance-policies-worth-it), you can think about more than what happens if you die.

That means you can plan for the long term, using the previously-mentioned cash value to safeguard your family’s future–or you can use it in case of a rainy day. Either way, you’re covered, and so are your partner and children. 

**Riders can cover you should you fall ill**

Life insurance policies [also come with riders](https://www.beamplify.com/blog/life-insurance-riders-explained), which are add-ons you can use to customize your plan. One of the most popular riders is the accelerated death benefit. With this rider, you can potentially release the death benefit before you pass away if you become seriously ill. 

It also kicks in if you can no longer work due to sudden illness or injury. It’s a smart way to think about financial planning, as your funds could be hit severely if you suddenly can’t work anymore. The result could be more burden and stress on your partner to provide. However, with an accelerated death benefit rider, none of those issues need to become a reality. 

Other riders that can help with financial protections include long-term care riders. This offers you care later in life if other people in your family are unable to look after you. As a matter of fact, [70% of individuals will need long-term care at some point in life](https://www.morningstar.com/articles/1013929/100-must-know-statistics-about-long-term-care-pandemic-edition). They benefit anyone who may need nursing or home care when they’re older and help you save thousands on the costs associated with long-term care. 

**Can help with debts later in life**

A life insurance policy can help with debt should you pass suddenly, with the rest of your family needing to pay the money owed. The payout from the life insurance death benefit can help repay loans and keep the family’s savings secure. 

Or, it could be that you incur short-term debt while you’re still alive and don’t have the means to pay it. A permanent policy can also help in such a scenario, as you can draw down the cash value and use it to pay for your debts without having to dip into your retirement funds and suffer early penalties or sell stocks or real estate and incur heavy taxes. While using the cash value to pay for debt might not have been your initial plan, having that financial protection is handy and can save the day if you find yourself in a bind. 

**Or send your children to college**

Then again, you might want to use the cash value to [send your children to college](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning). The annual cost of going to college is $35,000, which isn’t the kind of money most people have lying down the back of the sofa. 

Unlike 529 plans, which are common for sending kids to college, a perm policy has fewer restrictions on distributions and allows you to keep funds from the federal financial aid methodology. 

The cost of sending a child to college adds up quickly. Covering it with the money you’ve accumulated via your perm policy will go a long way to protecting yourself financially, thus ensuring your other finances remain untouched. 

**Life insurance can reduce income tax**

While you can’t claim your life insurance policy against your tax, you can use it in other ways to save on taxes. For starters, a perm policy has [tax-free benefits](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings) when you build and withdraw your cash value. That means if you’re using your permanent life insurance to supplement your retirement income, the funds [don’t count into your income taxes](https://beamplify.com/blog/how-to-reduce-your-income-tax-with-your-insurance-policy) (unlike a 401K or IRA) and can actually help lower your overall income taxes in retirement.

When you release the equity in your cash value, you can do so in the form of a 0% loan to yourself. Now, you can’t pay tax to yourself, which means the loan is tax-free. And when it comes to paying it back, you use the increased death benefit after you pass. What’s left (and it should be a fair amount) is then given to your beneficiaries. 

### **In conclusion: life insurance for financial protection**

Using life insurance for financial protection offers benefits both in life and death, thanks to its cash value aspect and death benefit. As a result, you can feel confident about your finances moving forward, taking advantage of factors like tax-free earnings and ensuring that you and your family’s financial situation looks healthy in the present and future. [Get a quote today!](https://quotes.beamplify.com/basic) 


Why Life Insurance Is a Step to Financial Protection

Life insurance for new parents can be a great way to provide financial security for your new growing family. 

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Sleepless nights, feeding your child every few hours, and your life totally transformed overnight. Welcome to parenthood. Oh, there’s also the little bundle of joy that will keep you smiling every day, too. We probably should have started with that. 

Becoming a new parent is both exciting and overwhelming at the same time, especially as you’ve got a little one depending on you from now on. Life takes on a new meaning, and you might just be thinking about life insurance for new parents to protect your child financially should the worst happen to you. 

In this guide, we’ve got you covered with everything you need to know about getting a life insurance policy as a new parent. So read on and take the stress away with our uncomplicated checklist. 

### **Life insurance for new parents**

Life insurance is something you should think about getting, [no matter your age](https://www.beamplify.com/blog/heres-what-you-need-to-know-about-millennial-life-insurance) or family situation. But there’s no doubt that it takes on increased importance when you have dependents who rely on you to provide for them.

The last thing you want to think about after having a child is the idea that you might not be around for them further down the line. But if the worst did happen and you were to pass away, the financial responsibility would fall on your spouse.

With a life insurance policy, however, you can protect your family with the death benefit it provides. As a result, you can see to it that they get proper financial protection, and their way of life (at least financially) doesn’t need to change. 

### **Term or perm?**

There are two primary options for picking a life insurance policy: term and permanent coverage. They both offer a death benefit, but that’s pretty much where the similarities stop. 

**Term** 

The names are a big giveaway: [term life insurance](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question) lasts for a set amount of time, usually anywhere between 5 and 30 years. For many parents, a term policy makes sense, as they may only want to protect themselves until their children reach the age of independence. 

However, term life insurance is somewhat streamlined in its offering. You’re only covered for a specific period of time, and should you wish to renew, the new premiums on the policy are charged at the renewal age. For example, if your coverage expires when you’re 55, and you want to renew, your new cost will be based on the age and health of a 55-year-old. 

There is also only a death benefit associated with a term policy. You don’t get any other benefits that could help both yourself and your child while you’re still alive. On the plus side, a term policy is usually the cheapest type of life insurance available. 

**Permanent**

Unlike term, a [permanent policy ](https://www.beamplify.com/blog/is-permanent-life-insurance-a-good-investment)never expires. You also can also get benefits while you’re still alive, such as wealth building with a cash-value aspect. Let’s break all of those down in more detail, as it’s a lot to take in. 

**One premium throughout your coverage**

Permanent life insurance is more expensive than a term policy, but it also has more value. That’s because your premium never expires, and you pay the same amount at 35 years of age as you do at 55. You’re locked in from the minute you sign up, which gives you more clarity over the monthly payments and what you need to pay. 

**Cash-value aspect**

With a perm policy, you can build wealth through [cash accumulation](https://www.beamplify.com/product/cash-accumulation) and access it while you’re still alive. When you pay into your premium, you essentially cover two pots: cash value and death benefit. Both of these grow over time, and you can draw down the cash you’ve accumulated later in life while you’re still alive. 

**Tax-free benefits**

When you take out your cash value, you have the option to do so by borrowing a 0% loan against yourself. Because you can’t pay tax to yourself, it means there’s nothing to give the IRS. Then, when you pass away, your death benefit (which has also grown) repays the loan, with the rest going to your beneficiaries. 

### **Should both parents get life insurance?**

The short answer is “yes.” Yes, they should. If one parent gets life insurance, but it’s the other one who dies, you essentially find yourself in the same situation as having no life insurance, as the person who passed wasn’t covered. 

Even if your other half is a stay-at-home parent, they should still consider getting a life insurance policy. Stay-at-home parents provide essential services, such as child care, which would need to be replaced if they weren’t around. 

Therefore, it’s important for both parents to get a policy and make sure that all angles are covered. There is also the option of a joint policy, though these aren’t typically as popular as individual coverage because they don’t offer the same protection as individual options. 

**Deciding on a beneficiary**

A life insurance policy requires you to pick a beneficiary– the person who receives your death benefit if you pass away. While you might want to name your [child as the beneficiary](https://beamplify.com/blog/heres-how-to-name-a-child-as-a-life-insurance-beneficiary), you’re better off choosing your spouse instead. 

Some state laws don’t allow minors to be named as the beneficiary on life insurance policies. And even when you legally name a minor, they will struggle to access the money until they turn 18. 

Therefore, it’s better to pick your spouse or a guardian you trust [if you’re a single parent](https://www.beamplify.com/blog/single-parent-life-insurance-heres-what-you-need-to-know). They will ensure that your children are well looked after and can maintain a high quality of life if you’re not around. 

**Helping your children with life insurance while you’re still alive**

We’ve already mentioned permanent life insurance and the benefits it offers while you’re still alive. But it’s really worth doubling down on how beneficial it can be for you and your new family. 

Let’s say you started a policy when your child was born and paid into the premium for 18 years. You could essentially use your cash value to [send your child to college](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning), which would mean you don’t need to find the funds elsewhere.  

Alternatively, you can use that wealth accumulation to give your child a head start when they reach adult age, helping them out where necessary with the nice little nest egg you’ve built up over the years. With a permanent policy, you can do so much more than protect your family if you die. 

### **In conclusion: life insurance for new parents**

Life insurance is something all new parents should think about getting. It can give you added peace of mind and protect your partner and children in the event of your death. And with a permanent policy you can also benefit while you’re still alive, covering all financial angles for your and your family. 


Life Insurance for New Parents

It's uncommon to see a minor as a life insurance beneficiary, but if it needs to be done, there are certain steps to take. 

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When you take out a life insurance policy, you will need to name a  beneficiary. Otherwise, there will be no one to leave your death benefit to. But what happens if you want to leave everything to a minor? Can you do it? Should you do it? And are there alternatives? In this guide, we've got everything you need to know about naming a minor as your life insurance beneficiary.

### **What is a life insurance beneficiary?**

A life insurance beneficiary is a person who receives a payout from the policy if you die. Choosing your beneficiary is important, as this is the person who is in line to receive the entire death benefit from the life insurance coverage.

Your beneficiary likely was one of the primary reasons you got life insurance in the first place. However, choosing one isn't as simple as you might think–state laws and policy rules can impact who you choose to leave your death benefit to. 

As a rule of thumb, you should always check the fine print on the terms and conditions with the provider before putting anything down in ink. That way, you can be confident over who is the beneficiary, so there are no complications when it comes to who receives the death benefit.  

### **Why you might want to name a child as your life insurance beneficiary minor**

In most scenarios, the person who receives the death benefit is a spouse or partner. This makes sense, especially if you have a family. Leaving the money to your significant other allows them to be in charge of the finances and ensure the rest of the family is looked after. 

However, there may be certain situations where you decide to name a minor as the beneficiary. One of the reasons for this could be because you don't have a partner or anyone you feel comfortable leaving the death benefit to other than your child. 

It's somewhat uncommon to name minors (someone under 18) as a beneficiary, as they will be left with significant financial responsibility. There are even some legal restrictions in place nationwide stopping adults from doing such a thing. And yet, there are still ways you can ensure that a child receives your death benefit. 

### **How do you name a child as your life insurance beneficiary?** 

Once you’ve decided on the type of life insurance you want ([term coverage](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question) or [a permanent policy](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance)), you’ll be asked to name the beneficiary. To name a child, you’ll need to notify the insurer when signing up for the policy. 

If a life insurance provider is happy to name a minor on the policy, you won't have any issues. However, there are some cases where you'll be prohibited from naming a child as the beneficiary. 

That's why you should check state laws and see their stance on minors being named on life insurance policies. If there are no state issues and the insurer is happy to name a minor, you can add your child to the policy as the beneficiary.

### **What happens to the death benefit?** 

If the worst was to happen and you passed away, your child would, in theory, receive the death benefit. That means they’ll be tasked with the responsibility of handling a potentially large sum of money. 

However, it’s not quite that simple, as most life insurance providers aren’t allowed to pay out a death benefit to anyone who hasn’t reached the “age of maturity.” And that age of maturity is 18 in every state apart from Alabama and Nebraska, where it’s 19. 

To further complicate things, the death benefit could be given to a court-appointed guardian–which could add a myriad of issues if you didn’t intend for anyone else to be the legal receiver of the death benefit. In the worst-case scenario, the result could be a legal battle that means the money is tied up for years while a resolution is sought. 

### **What about the alternatives to naming a child?** 

Naming a child as your benefit is an option, but it might not be the best one. Instead, you should explore other potential avenues, which still end up with the minor benefiting from the money you leave behind. 

**Appoint a guardian** 

Most states allow a legal guardian to receive payouts on behalf of minors, which means you can appoint someone you trust to act in the best interest of your child. They will manage the childs’ finances until they reach 18, at which point the child will have full access to the death benefit. 

**Establish a trust**

If you don’t have a guardian in mind, there’s always the option of establishing a trust. This can be a smart solution for leaving money to your child and sees you set up a life insurance trust, with the trustee overseeing the funds and distributing the money as you wish.  

**Name your child as a contingency benefit**

When you take out a life insurance policy, you'll need to name a primary and contingent beneficiary. If the primary beneficiary dies before you do, the death benefit goes to the contingent. Most people choose their spouse as the primary, with children sometimes used as the contingent, so their money stays in the family. This will stop your money from going to the estate, which could mean chunks of the death benefit covering things like legal fees and debt payment. However, with a child named in as the contingent, you'll ensure the money stays in the family. 

### **In conclusion: doing it for the kids**

Naming your child as the primary beneficiary on your life insurance policy is an option, but you should always aim to leave it with someone aged over 18 first, ensuring they take care of the child and protect the money until the minor is old enough to access it. But even if you did decide to leave it directly to your child, you do have options that will ensure the minor is well looked after if you’re no longer around. 


Here’s How to Name A Child As A Life Insurance Beneficiary

Discover the answers to the question of why is life insurance so important and why it can be helpful for you today. 

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Everyone has a list of excuses for why they think they don’t need life insurance. Trust us, we’ve heard them all.

*I’m young, I’m healthy, I have a great job, I’m single, I don’t have kids. I’m making smart investments, I’m going to live forever!*

While we also wish you were going to live forever, the truth is that life insurance is so important for anyone and everyone. First, let’s start by answering the question- why now?

**Why now?**

The best time to buy life insurance is, well...yesterday. The younger you are, the cheaper your life insurance is. Often, people will get term insurance in their 20’s or 30’s and switch to permanent in their 40’s and 50’s. But the longer you wait to get either term or permanent life insurance, the more expensive it gets. Plus, if you wait too long, there’s a greater chance that you might not qualify due to health concerns.  If you want to get the most out of your life insurance for the least amount of money, buy now.

### **What are the risks of not having life insurance?**

**You leave your family and loved ones unprotected**
Whether you choose [term or permanent life insurance](https://beamplify.com/blog/term-or-permanent-that-is-the-question), these policies help pay for final expenses after death, including funeral costs, medical bills, estate settlements, or other unpaid debts. Without life insurance, all these expenses have to be dealt with one at a time, draining whatever may have been in a savings account. By having life insurance you relieve your family of the burden of having to deal with all of these issues on their own.

**You miss out on financial security and peace of mind**
One of the greatest intangible benefits that explains why life insurance is so important is the peace of mind that comes with knowing your family is covered in the event of a tragedy. Plus, not only do you get to go to bed at night knowing your loved ones are protected, but you’re also making a savvy investment while you’re still alive (especially if you [invest in permanent life insurance](https://www.beamplify.com/blog/is-permanent-life-insurance-a-good-investment)). Who doesn’t want financial security? More on this in a bit.

**You are literally losing money**
Imagine withdrawing your monthly paycheck and throwing a handful of bills in the trash on your way out of the bank. That’s what you’re doing if you don’t have life insurance...ok, maybe that’s a bit dramatic, but you really are missing out on an incredible investment opportunity. The reason why life insurance is so important is that it not only protects your family when you’re gone, but it helps all of you while you’re alive. Whether you’re using life insurance to [build up tax-free savings](https://beamplify.com/blog/5-modern-ways-to-build-taxfree-savings) or if you just want to [invest like the real adult you are](https://beamplify.com/blog/how-to-adult-like-the-rich), life insurance can help you make sure you’re making the most out of your money.

### **So, what are the benefits that make life insurance so important?**

**Tax-advantaged wealth-building**
Two things in life are guaranteed: death and taxes. Life insurance helps you with both by allowing you to grow wealth and access the returns tax-free. As you think about your financial future, permanent life insurance means you don't pay any taxes on interest, dividends, or capital gains on the cash-value aspect of your policy if you decide to withdraw.

**Safety net for emergency funds**
Are you worried that your life insurance policy is going to tie up the cash you have on hand? Think again. Permanent life insurance policies let you access your money tax-free when you need it the most. If you want to buy a home or to pay for your child's college, you can take out the cash value of your policy without penalties after a 10 year vesting period (which can be much earlier than 59 ½ for a 401K or IRA account if you’re starting young). If you’re looking to renovate your home or need emergency cash for your family, you can take it out of your permanent life insurance policy without having to tap into your 401K or sell your stocks at an inopportune time and suffer the taxes and penalties that come with those options. Whether you have a large expense you’re planning for or if something unexpected comes up in the future, your policy is there to help you.

**Protection in case of illness or injury**
Every permanent life insurance policy comes with a death benefit. But one reason why life insurance is so important is that you may even be able to receive somewhere between 25% and 100% of the policy before you die. If you develop certain health conditions or you get severely injured and can no longer work or pay the bills, you can access cash from your life insurance policy’s death benefit to take care of anything you need.

### **That sounds great, but how do I know if I’m someone who needs life insurance?**

**Parents and Families**
Every parent wants the best for their kids, and we know you’re no exception. But as college gets closer, the mountain of tuition costs gets scarier and scarier to climb. A permanent life insurance policy gives you a safe and secure way to put money away for your child’s future. Whether you want to pay for their college, help them buy a house (or heck, buy your own house!), life insurance can help you save up for the big expenses of life.

**Employers**
If you own your own business, you probably already know why life insurance is so important. Personal life insurance can protect you in the case that you can’t fulfill your working duties, and the basic options for business insurance typically include workers’ compensation and unemployment insurance for your employees.

**Anyone who wants to retire young (or well)**
Looking to get rich quick? Well, that’s not exactly why life insurance is so important. Instead, your life insurance gives you access to safety and growth, while giving you the flexibility to access emergency cash much earlier than your typical retirement account. That way you can be prepared for whatever life may throw at you, or if it throws nothing at all, you can make the right financial decisions today to have a better, safer, and more secure tomorrow with the right policy.

And if you’re still unsure why life insurance is so important, let Amplify answer any other concerns you have. There are no dumb questions. Seriously. [Just ask](https://beamplify.com/contact-us).


Why is life insurance so important?

Life insurance vs. savings is a decision that financially savvy people often have to make. The stats speak for themselves, it's better to invest in a permanent life insurance policy. 

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We’re told about the importance of savings accounts from a young age and how they help us prepare for the future. But what if you could build wealth and protect your loved ones if the worst should happen at the same time, essentially combining life insurance and a savings account into one? Well, it turns out you can with a permanent life insurance policy. 

### **Here’s everything there is to know about life insurance vs savings and which option is best for you:**

**Does life insurance work like a savings account?**

Most people think of life insurance as protection for their loved ones should they pass away. And while life insurance does just that, it also has several benefits while you’re still alive–such as acting as an [investment vehicle](https://www.beamplify.com/blog/investment-concepts-you-should-know-about) where you can build up savings through wealth accumulation. 

With a [permanent life insurance policy](https://www.beamplify.com/blog/is-permanent-life-insurance-a-good-investment), you can access something called “cash value,” which works similarly to a savings account. Perm life insurance coverage is essentially split into two components: [cash value](https://www.beamplify.com/product/cash-accumulation) and death benefit. When you pay into the policy, you’ll fund both of these pots.

As a result, your cash value and death benefit grow over time. You can then access the cash accrued later in life to spend on whatever you wish, much like a savings account. Of course, there’s also a growing death benefit, which you can leave to your beneficiaries when you pass away. 

​### **Life Insurance vs savings: what are the key differences between them?**

**Should you really consider a permanent life insurance policy over a savings account? Let’s take a look at the two side by side to see their key differences.**

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A savings account does what it says on the box: it lets you save for the future. But there are strings attached, such as paying tax on the interest accrued over time. Not only are life insurance savings tax-free (more on that shortly), but you also get the added bonus of a death benefit. 

Although 71% of Americans have some form of a savings account, the majority of them only have between [$1,000 and $5,000 in actual savings](https://www.fool.com/the-ascent/research/average-savings-account-balance/). It’s not much to depend on, especially when you begin to factor in costs later in life and after you pass away, such as funeral expenses.

Five thousand dollars doesn’t leave you with any financial freedom unless your only worries are paying the Netflix subscription. In contrast, a life insurance policy allows you to build accessible wealth when you’re still alive while providing financial protection to your loved ones when you die. 

As a matter of fact, you can grow your cash 6-8% on average annually, compared to a measly 0.1% in your savings account. That’s many times more growth and much more wealth in your retirement future.

Therefore, a permanent life insurance policy covers more bases and still offers the savings benefit. So you get your Netflix subscription taken care of (plus loads of other stuff), and you can help your loved ones out by leaving them a financial sum when you pass away.

**Can you combine the two?**

It’s not either-or, and many people opt for a permanent life insurance policy and a savings account, usually [some form of a 401(K)](https://beamplify.com/blog/are-401ks-worth-it-anymore) provided by their employer. This way, you can maximize your financial security in the long term and set aside some money for a rainy day.

A life insurance policy covers you in a way that savings can’t. However, most savings accounts don’t require a monthly premium, so you can set up savings alongside your perm policy and access the cash from both of them later in life. 

**Are there any other benefits to permanent life insurance?

A [permanent life insurance policy](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance) doesn’t only offer a cash-value element and a death benefit. It has other factors that come in handy and can work out in your favor over the long term, from its fixed-rate premiums to [tax-free interest](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). 

**Fixed-rate**

Unlike a [term life insurance policy](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question), permanent coverage has only one premium that you pay for your entire life. There’s no increase, which means the amount you’re offered when you sign up always stays the same. And because life insurance is [cheaper the younger you are](https://www.beamplify.com/blog/heres-what-you-need-to-know-about-millennial-life-insurance), there are plenty of benefits to getting it in your earlier years. 

**Tax-free**

While most savings accounts require you to pay tax on your earnings, a permanent policy won’t see you pay anything to the taxman. When you withdraw your cash value, you can take it out as a 0% loan with no tax requirements. After you pass, the loan is repaid with your death benefit, with the leftover money being passed onto your loved ones. 

**In conclusion: a better way to save**

It doesn’t need to be life Insurance vs savings and can instead be a little bit of both. But if you only choose one, just remember that permanent life insurance allows you to save and build wealth over time while also protecting your family should the worst happen. It offers more than a savings account and lets you cover every angle, so there are no nasty surprises later in life. 


​Life Insurance vs. Savings: What You Need to Know Now

401(k)s are only worth it in certain scenarios, particularly through an employer, but there are similar, less known options like permanent life insurance. 

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401(k) retirement plans were established in 1978 and continued to grow in popularity throughout the 1980s. But before 401(k)s, underfunded pension plans paid a predefined retirement benefit when workers retired. These pension plans depended entirely on the employer to make a contribution to a pool of funds set aside for the worker’s future benefit.

When was the 401(k) created?

If you’re asking are 401(k)s worth it anymore, the answer isn’t a simple yes or no. Every contribution to a 401(k) reduces your income, which then decreases your tax burden. At the same time, the benefits of 401(k)s is that employers have a fiduciary duty — a legal responsibility to maximize their employee’s returns. With matching plans, employees can benefit from simultaneous contributions from their employers. Also, the high withdrawal fees associated with 401(k)s can reduce the temptation to withdraw savings for something else. The main argument against 401(k)s is that they don’t adequately prepare workers for retirement, given so many are behind on savings.

Are 401(k)s worth it anymore?

Permanent life insurance policies have been a tax-efficient model for the wealthy for years. Why? Because permanent life insurance policies include certain benefits that make them a great way to diversify your portfolio and max out your tax efficiency. So whether you’re nearing retirement age or have a long time to save, permanent life insurance can be a great resource for retirement income.

What’s a good alternative to a 401(k)?

Originally, a 401(k) was the most popular do-it-yourself approach to retirement savings. But like bell-bottom pants (and apparently skinny jeans now?), not everything stays in style forever. This has led to a lot of people asking: are 401(k)s worth it anymore?

401(k)s are still the most popular option among employers, but it’s up to you to answer the question of are 401(k)s worth it for yourself. So, if your employer is offering you a 401(k), is it actually the best option for your retirement plans? Well, before we ask are 401(k)s worth it anymore, we should determine if they were ever worth it in the first place…

**When was the 401(k) created?**

401(k) retirement plans were established in 1978 and continued to grow in popularity throughout the 1980s. But before 401(k)s, underfunded pension plans paid a predefined retirement benefit when workers retired. These pension plans depended entirely on the employer to make a contribution to a pool of funds set aside for the worker’s future benefit.

Ultimately, pension plans became too much to manage and the 401(k) came along and changed everything. Unlike pension plans, 401(k)s have no defined benefit. Instead of relying on employers to set aside funds, in a 401(k), it’s the individual employee’s responsibility to save for their own retirement.

Instead of employers having to worry about setting aside money for their workers’ retirement, they instead put the responsibility back in the hands of individuals to determine how much they wanted to save while employers would “match” whatever they chose.

### **So, are 401(k)s worth it anymore?**

If you’re asking yourself are 401(k)s worth it, then you should start with the positives. Arguments for 401(k)s hinge on two main benefits: tax savings and employee matching programs.

Every contribution to a 401(k) reduces your income, which then decreases your tax burden. At the same time, the benefits of 401(k)s is that employers have a fiduciary duty — a legal responsibility to maximize their employee’s returns. With matching plans, employees can benefit from simultaneous contributions from their employers. Also, the high withdrawal fees associated with 401(k)s can reduce the temptation to withdraw savings for something else.

Those factors are fair, but they don’t answer the question of are 401(k)s worth it anymore. And truthfully, the main argument against 401(k)s is that they don’t adequately prepare workers for retirement, given so many are behind on savings. A [2019 study found that 75% of 401(k) savers won't have enough to maintain their lifestyles when they retire](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3294422).

Not to mention, the inherent extra return participants enjoyed for many years has almost disappeared because of [changes in tax laws and high fees](https://www.bloomberg.com/opinion/articles/2020-07-21/401-k-plans-no-longer-make-much-sense-for-savers). If you’re asking are 401(k)s worth it anymore, the answer isn’t a simple yes or no. There are plenty of factors to consider. But you can’t completely answer the question without looking at other options.

**What’s a good alternative to a 401(k)?**

[Permanent life insurance policies](https://beamplify.com/blog/a-comprehensive-guide-for-life-insurance) have been a [tax-efficient model](https://beamplify.com/knowledge-center/faqs/cash-accumulation) for the wealthy for years. Why? Because permanent life insurance policies include certain benefits that make them a great way to diversify your portfolio and max out [your tax efficiency](https://beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). So whether you’re nearing retirement age or have a long time to save, permanent life insurance can be a [great resource for retirement income](https://beamplify.com/blog/permanent-life-insurance-for-retirement-income-how-does-that-work).

Sure, your 401(k) grows tax-free, but once you tap into those resources, you do pay taxes as if it were any other kind of income. A permanent life insurance policy is different, and you can tap into the cash value of the policy without any tax ramifications.

If you want to learn more about how a life insurance policy could boost your savings and spare you from wasting money in a 401(k), reach out to the team at Amplify and ask any and all questions you have.

[\[Take the 5 Min Quiz\]](https://quotes.beamplify.com/basic)

We’re happy to help you find a plan that works for you.

With a permanent policy, life insurance for empty nesters can provide benefits like cash-value accumulation and tax-free savings.

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Ever thought about getting life insurance as an empty nester? With a permanent policy, you benefit from factors like cash-value accumulation and tax-free savings, setting you and your loved ones up for the future–even if the kids have flown the nest. In this guide, we’re looking at life insurance for empty nesters and why it can be beneficial in your later years. 

**The kids have left the building**

Your adult kids leaving home must bring on a range of emotions. You’re sad to see them go, but also, now it’s your time to enjoy that trip to Barbados you never got to take. Plus, there’s an element of pride seeing your children grow into adults doing their own thing and being independent–until they ask for a few bucks to cover the unpaid water bill in their new apartment, that is. 

Where does life insurance come into all of this, you ask? Most people think life insurance coverage is for adults who have just had kids and want to protect their future. While that may be true with a term policy, [permanent life insurance](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance) offers an entirely different dynamic.

It has several benefits, including the chance to build wealth while you’re still alive and access tax-free savings. But how, exactly, does that apply to your and your empty nester status? We’ve put together a few reasons why life insurance for empty nesters is a great idea. 

### **But first… the benefits of permanent life insurance**

A [permanent life insurance policy](https://www.beamplify.com/blog/is-permanent-life-insurance-a-good-investment) has all the features of term coverage plus a whole lot more. Unlike term, a perm policy never ends, and you pay the same premium throughout the coverage. That means the amount you pay for your first payment stays the same throughout the 10th, 50th, and, well, you get the point.

There’s also a [cash-value element](https://www.beamplify.com/product/cash-accumulation) that allows you to build wealth while you’re still alive. Essentially, you pay into two pots: one for your death benefit and another for the cash accumulation. Both of these pots grow over time, and you can access the cash value while you’re still alive. 

Even better, that wealth you grow is tax-free, which means you can enjoy savings without paying the tax man. How does that work? When accessing your cash value, you can do so via a 0% loan to yourself. Because there’s no need to pay yourself tax, the loan is entirely tax-free. 

When you pass away, the death benefit repays the loan. However, that death benefit has grown with each monthly payment, so there will still be plenty to leave to your loved ones. 

Now, let’s look at how life insurance for empty nesters can help you in the short and long term. 

**Use perm life insurance to support your adult children**

Sure, your adult children have left home to do their thing and enjoy a life of independence. That doesn’t mean they won’t rely on you for financial support, though. Most parents find themselves providing some kind of financial aid to their adult kids; whether it’s helping with student loans or paying off that credit card they took out naively. 

Permanent life insurance benefits can help support your kids when they need it most, with the cash value going towards things like [covering their college fees](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning), or helping them get on their feet after fleeing the nest. 

**Or help out aging parents**

Even if your adult children don’t require any financial help when they leave home, you might find that your [aging parents are in need of assistance](https://www.beamplify.com/blog/permanent-life-insurance-for-seniors-it-makes-sense-we-promise). Long-term care is a significant expense that can quite easily burn a hole in your bank account if you don’t have the right insurance coverage in place. 

Many seniors find themselves in a situation where they can’t afford the costs associated with long-term care, and so the responsibility falls on you. Much like supporting your adult children, permanent life insurance can help you look after your parents as they get older and assist with the costs associated with long-term care. 

**You can support your spouse**

While no one likes thinking about things like death, there needs to be an element of planning put in place–especially as you get older. The majority of empty nesters are used to having two incomes for the household. However, if one spouse was to pass away, the financial burden would fall on the surviving partner. 

With a permanent life insurance policy, you can use the death benefit to ensure that your partner isn’t left in financial trouble if you pass. You can also [add handy riders](https://www.beamplify.com/blog/life-insurance-riders-explained) to the policy, giving you access to long-term care should you become seriously ill. 

**Supplement “lost” retirement savings**

No matter [how good your retirement plan is](https://www.beamplify.com/blog/permanent-life-insurance-for-retirement-income-how-does-that-work), the whole thing can be thrown into chaos if you or your spouse passes away unexpectedly. It would leave the surviving partner with the burden of making up for the loss of retirement savings. 

Fortunately, a permanent life insurance policy can help offset the loss with its death benefit. It would ensure that either you or your spouse would be financially covered and could continue receiving retirement-level income uninterrupted. 

**Keep your access to great healthcare**

The [average 65-year-old couple will pay $260,000](https://www.credit.com/blog/the-average-65-year-old-retired-couple-needs-260000-to-cover-health-care-154804/) during their retirement, and that’s before long-term care costs are even considered. If you or your spouse need the latter, then you can expect to pay an additional $100,000-plus on top. 

It’s a significant chunk of money to think about. Yet, there’s no need for a stressful scenario if you have a permanent life insurance policy, which can help you protect your surviving spouse against increasing healthcare costs, as you can get access to long-term care. 

**Leave behind an inheritance** 

The cash-value element of your permanent life insurance policy can help you in life, while the death benefit is a smart way to leave an inheritance for your adult children and partner. Even better, they won’t need to pay tax on the money received as it’s tax-free. 

Not to mention a portion of the death benefit can also be used to cover funeral expenses when you pass away. The extra funds can come in handy for your adult kids and ensure they don’t have to dip into their own fund to pay for your funeral. 

### **In conclusion: thinking about the future**

A permanent life insurance policy is beneficial for empty nesters, as it safeguards you against many potential tricky scenarios. There’s also the cash value aspect, which means you have something to look forward to from your permanent policy while you’re still alive. Life insurance for empty nesters is a smart move for anyone who wants to protect their family’s financial future and enjoy the odd benefit here and there while they’re still alive. 

[Check out some life insurance options for empty nesters by getting a customized quote with Amplify.](https://quotes.beamplify.com/basic)


Life Insurance for Empty Nesters: Here's What You Need to Know About Financial Planning

It can be overwhelming to buy a policy for the first time but here's the life insurance advice you should take note of beforehand. 

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So you're thinking about getting life insurance, but it's your first time exploring a policy and everything it offers. You probably know a few things, like how it has a death benefit that looks after your loved one when you pass away. But that's about it. What you might not know, however, is that there are different types of life insurance options, including coverage that helps you build wealth while you're still alive. You're surprised, right. But in a good way, of course. It gets even better, and we've got some handy life insurance advice if it's your first time buying a policy.

**1\. What type of life insurance do you want?**

Before enjoying the benefits of life insurance, you’ll need to decide on the type of policy you want. There are two primary options: [term](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question) and [permanent](https://www.beamplify.com/blog/should-i-convert-to-permanent-life-insurance). A term policy covers you for a specific amount of time, usually anywhere between 5 and 30 years. Once the term ends, you’ll no longer have life insurance.

A permanent policy differs as it gives you life insurance that doesn't expire. You also get the benefit of [wealth accumulation through the cash-value aspect](https://www.beamplify.com/product/cash-accumulation), which allows you to [build savings tax-free](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). Even better, these savings can also be accessed while you're still alive, which adds a whole new dynamic to the concept of life insurance. Term coverage is the cheaper version, but it doesn't have any added features on top of the death benefit.

**2\. Decide how much coverage you need**

It’s been known for people to underestimate [how much coverage they need](https://www.forbes.com/advisor/life-insurance/how-much-life-insurance-do-you-really-need/), so you really should think about the amount you want to insure yourself for. Yes, you’ll probably need to pay off major debts like the mortgage, but think about what the people you’re leaving behind need on a day-to-day basis.

The good news is that you get a [customized quote](https://quotes.beamplify.com/basic) based on your unique needs and interests by taking a 5 min questionnaire with Amplify. It may also be worth getting a death benefit equal to 10 times your salary, as this tends to be a basic way of working out the amount needed for a life insurance policy.

Don’t worry; it doesn’t have to break the bank. You can get a large coverage amount and still get cash savings and long term benefits by getting a combination policy, which gives you a higher coverage amount for the 10, 20, or 30 years and then lowers your coverage (when you need less protection) while still allowing you to draw cash savings for your retirement and have some amount of permanent protection.

**3\. Understand what affects your premiums**

The premium is the amount you pay the provider each month, so you want to ensure that you understand how it all works. Essentially, the amount you pay will be dependent on several factors, such as whether you opt for a term or permanent policy.

However, the main aspects to consider are your age, health, and even sex. The younger you are, the cheaper your premium is. That goes for your health, too, as someone in rude health will pay a lot less than a person with previous health conditions. Lastly, [women typically don't pay as much](https://www.beamplify.com/blog/everything-you-need-to-know-about-life-insurance-for-women) for their policies as they're seen as less of a risk compared to men, who don't live as long on average.

**4\. But don’t just focus on the premium**

The premiums are important and will be a major driving factor in your decision. But if we could give you any life insurance advice, it's that you look at the bigger picture and don't just focus on the premiums.

Take permanent life insurance, for example. On paper, its premiums are more expensive than a term policy. Dig a little deeper, though, and you’ll see there’s more value in the long term with perm coverage. That’s because your premiums don’t change the entire time you’re covered.

A new policy taken out at the age of 35 will have the same premiums when you’re 75. However, if you wanted to renew a term policy at 75 (after initially taking it out at 35), you’ll be charged at the renewal age rather than when you took out the initial coverage.

**5\. Know what drugs life insurance providers check for**

Life insurance providers check for a lot of drugs, which makes sense as they need to be thorough. Therefore, it’s worth researching [which types of drugs](https://www.beamplify.com/blog/what-drugs-do-life-insurance-companies-test-for-we-have-insider-info) they check for before signing off on your policy.

Some of the basics include things like anabolic steroids, Methamphetamine (otherwise known as crystal meth), and Cocaine. And while those specific drugs are pretty self-explanatory when it comes to why you might be rejected, providers do differ over substances like Marijuana: some flag it up while others are happy for it to appear in your system.

**6\. Look at the available riders**

Life insurance is highly customizable, and it's handy to know about available riders when getting life insurance advice. [Riders act as add-ons](https://www.beamplify.com/blog/life-insurance-riders-explained) that allow you to customize your life insurance policy.

They add benefits to your policy, such as long-term care, access to your death benefit if you become terminally ill, or the chance to waive premiums. Knowing which riders are available and how they can help you can increase the benefits you get from your life insurance policy will add more options to the policy and give you a greater amount of customizable features. .

**7\. See if your employer offers life insurance**

Many employers offer [life insurance to their employees](https://www.beamplify.com/blog/is-life-insurance-from-your-employer-good-enough). This is known as “group life insurance” and can come in handy if you’re looking for basic coverage. We say “basic” because group life insurance isn’t customizable, usually has a cap for the death benefit, and will be with the employer’s provider of choice.

Still, it can be helpful, but you might want to think about adding a personal policy alongside your work coverage. A personal policy allows you to customize everything to your liking and will be more tailored to your needs instead of a one-size-fits-all approach to group life insurance.

**8\. Be honest in your application**

We get that you’ll want to keep premiums as low as possible, but telling porkies on your life insurance application will only end in tears. If you omit any important information and the provider later finds out, your policy will essentially be disqualified.

Most insurance companies can get information about you by accessing your medical records. So even if you did change some of the info, there’s a good chance they would find out before the policy begins and refuse to give you life insurance. The truth really will set you free–or, you know, grant you access to life insurance.

**9\. Think of permanent life insurance as a savings account**

Most people think about life insurance as something that covers your loved ones if you’re no longer around. And while that is the crux of basic life insurance, it’s not the only benefit. If you get a [permanent life insurance policy](https://www.beamplify.com/blog/is-permanent-life-insurance-a-good-investment), you can build your wealth through cash value. That makes it more like a savings account, with the average returns anywhere between 6-8%.

A perm policy will see you paying into two pots: the death benefit and cash value. Both of these grow over time, and you can access the cash value while you’re still alive and spend it on pretty much anything you want.

On top of that, the savings you accrue are tax-free. That’s because you can withdraw the cash value by taking out a 0% loan against yourself. Then, when you pass, the loan is repaid via the growing death benefit, with the leftover going to your loved ones.

**10\. Get a quote**

You’ve got the details about life insurance, so all that’s left to do is get a quote. So find a policy that’s right for you and matches your preferences.

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<iframe src="https://beamplify.com/embed/amplifyWidget54363?utm_source=amplify-blog&utm_origin=10-tips-first-time-blog-post" style="overflow: hidden; width: 100%; height: 500px; border: 0;" scrolling="no"></iframe>
```

### **In conclusion: Life insurance advice**

Everyone needs some life insurance advice before setting up their first policy. With our tips, you will be able to make an informed decision about life insurance and make the right decisions for you and your family’s future.

10 Best Tips If You’re Buying Life Insurance for the First Time

Permanent life insurance for a child could be an easy way to set them up in the future through tax-free wealth building and protection. 

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Life insurance is for oldies, right? Think again. Not only should you get a life insurance policy in [your younger years](https://www.beamplify.com/blog/heres-what-you-need-to-know-about-millennial-life-insurance); you can also take out coverage for your children. And it’s as easy as ABC, 123, so put on an episode of Barney and find out everything you need to know about permanent life insurance for children with these top tips. 

### **What is child life insurance?**

Usually purchased by a parent or even a grandparent, child life insurance provides coverage to the life of a minor. These policies are typically offered as whole life products, which is a form of permanent life insurance. 

Unlike a [term policy](https://www.beamplify.com/blog/term-or-permanent-that-is-the-question), permanent life insurance lasts for the entirety of someone’s life–in this case, it would be the life of the child. It works just like an adult policy, covering the child for a specific amount for the child’s whole life, but at a very, very low cost that they get to keep for their entire life.

Now, we know life insurance is often thought of as a morbid subject. However, permanent life insurance comes with accessible benefits while you're still alive, such as wealth accumulation. But we'll dive deeper into that in a bit. With permanent life insurance for a child, the child is insured, but the parent, grandparent, or legal guardian can act as the policyholder and switch the ownership (and payments) over to the child later in life if they wish. 

### **Why get permanent life insurance for my child?**

None of us want to think about death. Fortunately, the death benefit aspect is only one portion of permanent life insurance, and you can use the policy as a form of [investment account](https://www.beamplify.com/blog/what-are-the-different-investment-types) for your little ones. In fact, there are several benefits to permanent life insurance for a child:

**Cash value accumulation**

When you pay into a permanent life insurance policy, you're essentially paying into two pots: the death benefit and the cash value. Each of these grows over time, with the cash value accessible later in life. So if you're paying into the policy from your child's birth, you can build up a nice little sum of money by the time they're 18–just in time to pay for their [college tuition](https://www.beamplify.com/blog/should-you-use-life-insurance-for-college-planning). Don’t need cash for college? They can use it for a down payment on their first home, or keep it growing for a very comfortable retirement for themselves.

**Long-term protection**

A permanent life insurance policy lasts for as long as you keep paying into the premium, and those premiums are cheaper the younger you are. That means paying into permanent life insurance for a child offers long-term protection at a lower locked-in cost. 

**Guaranteed future insurability**

Most permanent life insurance for a child offers a guaranteed purchase option. This allows you the right to buy a portion of the insurance at a locked-in health classification in the future. That means, even if your child develops a medical condition later in life or even chooses a risky career, their life insurance premium won't increase even though they technically become more of a liability to the life insurance provider. 

**How much does it cost?**

The younger and healthier you are the lower your premiums. Therefore, permanent life insurance for a child can be significantly cheaper than it is for adults. For example, it can be $10-50 a month for permanent coverage around $250,000-$500,000. That is more than 1/10 that of a 20-year-old’s premium for that amount of permanent coverage!

That also means you’re paying the same premiums for a child at three months, five years, and 15 years, etcetera. The more coverage you get the slightly more expensive your premiums will be, but the more money you can save into your policy to keep it growing tax-free for your child’s nest egg later in life. 

*For more info on permanent life insurance costs for a child, why not check out the [available policies](https://www.beamplify.com/) and see if you can find coverage that’s right for you and your kids?*

### **What else should I know about permanent life insurance?**

Whether you’re taking out a permanent life insurance policy for you or your child, there are several benefits that sit nicely alongside the cash-value element. These include tax-free options and the ability to customize your policy with riders. 

**Tax-free**

Unlike other savings accounts, a permanent life insurance policy is [completely tax-free](https://www.beamplify.com/blog/5-modern-ways-to-build-taxfree-savings). That means you don't pay a penny to the IRS when it comes to withdrawing the cash value later in life. How does that work, you ask? When you withdraw cash, you essentially take it out as a 0% loan against yourself, that you never have to pay back. And because you can't pay yourself tax, there are no taxes to pay against it. Then, the accumulated death benefit pays off the loan when you pass, with whatever's leftover going to your loved ones.

**Locked-in premiums**

Again, permanent life insurance has locked-in premiums. You pay the same amount each month the entire time you have the coverage, and your death benefit and cash-value element continue growing throughout this entire time. 

**Helpful riders**

A life insurance rider allows you to customize your plan with extras that could come in handy should certain scenarios arise. Some of these riders are included with premiums; others can be added for an extra cost. Popular life insurance riders include:

- Child term rider
- Guaranteed insurability rider
- Accelerated death benefits
- Long-term care rider
- Waiver of premium rider
- Term insurance rider
- Return of premium rider

For more info on what these riders entail, as well as the benefits of adding riders, check out our article covering everything you need to know about life insurance riders. 

### **In conclusion: Permanent life insurance for a child**

Considering permanent life insurance for your child doesn't mean thinking about what happens if the worst occurred. Instead, you can look at it as a way to build wealth for them over time with the added benefit of being covered. When they're older, they'll likely thank you for giving them a cash-value element that can jump-start them financially later in life and keep their life insurance premiums low for the rest of their future as well. 


Permanent Life Insurance for a Child? It's Easy as ABC, 123

Hanna Wu, cofounder of Amplify Life Insurance, talks about how she came up with the idea to use technology to democratize permanent life insurance.

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"My dad has cancer.” These were the reverberating words from my best friend of over 20 years. She was my first friend when I came to the United States at 7 years old. 

That was the first time I saw the true impact of a life insurance policy. At that time, I was 3 years into running our financial planning agency offering financial advice, 401Ks and IRAs, education funds, business retirement plans, and permanent life insurance.  My best friend’s entire family had set up their policies with my parents, who were also life insurance agents back in the day. Each of them got a permanent life insurance policy with retirement savings and long-term care protection. 

Over the next 8 months, I saw a man who was like an uncle to me go from a strong and healthy financial head of the family to a frail being that needed 24/7 care. I saw my best friend and her mom not just lose their father and husband, but lose their financial backbone in the same stroke.

I saw how they took cash value from their policy to pay their bills while he was in the hospital, and some of the coverage to use for his funeral costs when he was gone. I saw how they used the rest of the leftover coverage to use for her mom’s annuity, which was going to give her a few thousand a month for the rest of her life since she never worked while he was alive.

Over the years, I took out my own cash value from my policy to open new offices for my business and returned the money to continue tax-free growth once the offices were up and running. My customers and team members have used their policy’s cash for all sorts of endeavors- buying stocks at opportune times, paying off student loans, and to supplement their down payments, just to name a few.

Known as the “Rich Man’s Roth”, I was taken by this product that was so prevalent in the wealthy 1% that the majority of high net worth families, large corporations, and banks used it to compound tax-free assets and provide large payouts in the coverage amount. 

How does this plan work? It can be quite simple – a majority of your premiums go into a savings or investment account that builds tax-free returns, provides flexible investment options, and allows access to your accumulated cash savings. The rest of your premiums pay for your cost of insurance that gives you a death benefit that you can use in a health emergency throughout your life or goes to your family when you pass. 

In contrast, almost every young family I encountered in my days of running an agency was unaware that this product existed despite the fact that [our young customers had the most to benefit from a life insurance investment vehicle](https://beamplify.com/blog/who-needs-permanent-life-insurance-the-answer-might-surprise-you) - lower premium rate at a young age, longer time horizon to build tax-free savings, and a coverage amount that can protect their income in a health emergency or go to their family no matter how long they live.

“[How come I’ve never heard about this](https://beamplify.com/blog/life-insurance-guide-5-things-you-dont-know-about-life-insurance)” and “sounds too good to be true” were some of the responses I’ve received from customers, and it’s no surprise when you take a closer look at the industry. Life insurance product details are locked in agent portals, unable to be accessed if you don’t have a license. Most of the industry consists of older, commission-driven life insurance agents who build their own book of business and are incentivized to move upmarket to high net worth and large policies.

It seemed that the current setup of the industry was backfiring on a younger generation of consumers and agents alike by effectively shielding its benefits with a lack of transparency and misaligned incentives. Today’s generation has access to more information at their fingertips than ever before, and this access has shaped their trust and purchasing behavior from word of mouth to brand, online testimonials, and their own due diligence. Unfortunately, the industry has not kept up with this transformation of how modern consumers are making their purchasing decisions. 

In 2019, my cofounder, Qiyun, and I started [Amplify](https://beamplify.com/) with the mission to help people build and protect wealth through life insurance. Our goal is to transform the traditional industry from agent-driven to consumer-centric by providing consumers direct access to quotes for life insurance investment products that they can customize for themselves and undergo an intelligent and delightful purchasing process. 

I will never forget how a permanent life insurance policy saved my best friend’s family. The future that we’re building towards is one in which all families have a bulletproof financial plan where there are funds available regardless of what life throws at them. We believe that at the end of the day, peace of mind is a universal aspiration. It’s time for permanent life insurance, a product with a long history of helping the 1% achieve greater security and affluence, to be utilized by everyday Americans to build a wealthier and more secure financial future for their own families.




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