Types of Life Insurance
2) Permanent Life Insurance: Continued ....
... into a cash value account and the interest rate is applied to the cash value account yearly. The interest rate might vary from year to year but there is generally a guaranteed minimum interest rate amount. The insurance company usually charges a yearly fee, which covers transience risks as well as administrative costs. This policy is generally looked at as a lasting policy as insurance companies normally charge a large amount on a Single Premium Life insurance policy if the insured takes money out during the first few years. The insured might take out a loan against this kind of policy and generally the terms are favorable to the insured. The majority insurance companies attempt to structure these policies to meet federal tax law necessities in order that death benefits are free from income tax to the recipient.
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