Permanent Life Insurance in Connecticut

What Makes Permanent Life Different From Term?

Term coverage ends after 10, 20 or 30 years, and most term policies never pay a claim because the insured outlives them. A permanent policy is built to be in force when you die, whenever that is, so the insurer prices it to pay out. That's why permanent life costs more, and why it can hold cash value you can borrow against.

When Is Permanent Insurance Worth It?

• You want to leave a set amount to children or grandchildren no matter when you die.
• Your estate may owe Connecticut estate tax and your heirs will need cash to pay it.
• You support a dependent who will need help for life, such as an adult child with a disability.
• You own a business and need lifelong funding for a buy-sell agreement.
• You want your funeral and final bills covered permanently with final expense coverage.

If the need ends when your kids are grown or your mortgage is paid, term is almost always the better value. A common approach is term for the large income need and a smaller permanent policy for lifelong needs.

How Do You Choose a Permanent Policy?

Start with what you want from the policy. For the lowest cost of lifelong coverage, look at guaranteed universal life. For guarantees on premiums, death benefit and cash value, look at whole life insurance. For flexibility, universal life insurance. For growth potential tied to the market with downside protection, indexed universal life. Buy from an insurer with a strong financial strength rating, since you're counting on it for decades.

Can You Convert Term to Permanent Coverage?

Many term policies let you convert to a permanent policy without new health questions, up to a set age or year. If your health has changed, conversion can be the only way to get permanent coverage at standard rates. Check your policy's conversion deadline now.

How Is Permanent Insurance Taxed in Connecticut?

Connecticut has its own estate tax and is the only state with a gift tax. A permanent policy you own is counted in your taxable estate. For larger estates, owning the policy through an irrevocable life insurance trust can keep the death benefit out of the estate. That's a job for a Connecticut estate attorney.