The nature of permanent life insurance being “permanent”, the rates of this type of policy is much more expensive compared to term life insurance policy. As the cost is spread at a level rate over the life of the policy, permanent life insurance has a higher premium. A portion of the premium of permanent life insurance policy is used to develop cash value. The cash value thus developed can be borrowed to fund for a college education or mortgage or else pay some other financial obligations.
Rate class determines cost of life insurance
After submitting your application for permanent life insurance, you will be required to undergo a medical examination to determine your “rate class”. The medical exams include basic physical tests, as well as urine specimen test, blood test and sometimes, an X-ray or EKG. The exam results, along with your medical history, lifestyle, whether you are a smoker or not together contribute to your “rate class”. The basic point to note is that the better is your rate class, the lower will be your rates.
Life insurance provides better value over time
In spite of the high cost of the premium, permanent life insurance is more affordable over time. This is because the premium remains constant over time. Additionally, the cost value that is built up in addition to the death benefit makes return on permanent life insurance more on your investment than a term policy.
Nowadays, finding a better life insurance policy is much easier with the availability of online information about it from different insurance companies. You need to take your time to do a thorough research on the different options that are available on life insurance and find the best deal on it. You can take the help of Standard and Poor's or A. M. Best to find the best rate available from a reliable life insurance company.