Permanent Life Insurance

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This is one of the two main types of life insurance, the other being term life insurance. Permanent life insurance remains in place until you die, whenever that may be. In addition to lasting as long as you live, as opposed to a specified term, permanent life also differs significantly from term life insurance by typically offering extra benefits, such as building up an internal savings fund known as cash value. For this reason, permanent life insurance policies are sometimes known as cash value policies. Cash value (also called surrender value) means you can decide to cancel the insurance policy before you die and receive some money. In other words, if you "surrender" the policy to the insurance company, it will give you cash in return. If the premiums become too expensive for you to continue the same level of coverage, you can decide to use the surrender value by giving it to the insurance company and still maintain the policy, but usually for a reduced amount. Sometimes you can borrow money using the surrender value as collateral, but if you don't pay back the loan, the lender might have the right to take some of the proceeds of the insurance when you die. There are three main subcategories of permanent life insurance: whole life, universal life, and variable life.