• Long-term care expenses, particularly in the absence of long-term care insurance.

• Debt repayment, such as a mortgage if the insured still has a mortgage in retirement years, as well as medical bills not covered by any health insurance.

• Additional business uses such as succession planning, buy-sell agreement, key person insurance, and executive retirement benefits.

• Asset diversification due to its tax advantages.

• Estate and legacy planning.

• These are some of the benefits that permanent life has to offer, and which are not available from term life or other savings vehicles.


It is axiomatic that every financial instrument serves specific purpose, and no instrument can do everything. While term life is designed to provide life insurance at low cost, it does not offer the benefits of savings potential, liquidity, lifetime protection and many living benefits that permanent life does. 

There are certainly downsides to permanent life. The main issue is that it requires a long-term commitment to realize the best result of a policy. Clients may lose money if they should want to cancel a policy in early years. The product may be too costly for many people no matter the benefits, although custom-designed policies can accommodate any premium level that is affordable to the client. Given the requisite long-term commitment, it is critical that advisors deal only with carriers with the best credit ratings to guard against defaults, though the industry has built-in safeguards through state insurance programs to protect the consumers, among other measures. Then there is a potential tax issue if a policy is not being managed properly, even though permanent life enjoys tax-free benefits not available to most other investment vehicles.

One common objection against permanent life is the high sales commissions. The problem with such objection is that it allows some of the bad practices to override the merits of the instrument, since overcharging in fees and commissions is certainly not unique to permanent life. Many mutual funds are still charging front and back loads of 5 percent or more, in addition to annual portfolio charges of 1-2 percent, while many other investment vehicles have fees that may exceed 20 percent.