855-468-8900
Whole Life Insurance
Whole life insurance merges a term policy with an investment part, which might be in bonds, money-market instruments, or stocks. It grows cash value you can borrow from. Both whole life and term policies offer fixed monthly payments throughout the policy's duration.
Non-Participating
Policy values like death benefits, cash surrender values, and premiums are typically set when the policy is issued and generally can't be changed later. This means the insurance company takes on the risk of future outcomes compared to what their actuaries predicted.
If actual future claims are higher than expected, the insurance company covers the shortfall. However, if actuaries' predictions on future death claims are too high, the insurance company keeps the surplus.
Participating
In a participating policy, the insurer shares extra profits, known as dividends or refunds, with the policyholder. The better the company performs, the bigger the dividend.
Indeterminate Premium
Similar to non-participating policies but with variable annual premiums. However, premiums will never go above the policy's guaranteed maximum.
Economic
Combining participating and term life insurance, some dividends buy extra term insurance, usually increasing the death benefit but reducing long-term cash value. If dividends fall short of projections, the death benefit may drop in those years.
Single Premium
A single-pay option involves making a large one-time payment. These policies often come with fees if you decide to cash out early.
Flexible Premium
Like a participating policy, but you pay premiums only for a set period, like 20 years, or until you reach a certain age, like 65 or 80. The policy lasts for your lifetime. These policies often cost more initially because the insurer must accumulate enough cash value in the early payment years to support the policy for your life's duration.
Variable Rate
These policies blend traditional whole life and universal life features. Instead of dividends boosting guaranteed cash value growth, the interest on the policy’s cash value changes with the market. The death benefit, like in whole life, stays the same for life. Premiums, similar to universal life, can vary but won’t exceed the policy's guaranteed maximum premium.
Whole Life Insurance Factors to Consider
Criteria
Whole life insurance usually involves paying premiums throughout the policy's lifetime. However, some plans allow for the policy to become "paid up," meaning no more payments are needed after a certain point, possibly as soon as 5 years or with just one large initial premium. Generally, if you don't start with a large payment when the policy begins, you can't switch to making them later on.
Assurances
The company usually guarantees the policy's cash values will grow, no matter how it performs or its death claims experience (unlike universal life insurance and variable universal life insurance, where costs can rise and cash values can drop).
Cash Flow
Cash values can be used as investment capital if you're financially stable enough to keep up with premium payments. You can access cash value tax-free up to the amount of premiums paid. Beyond that, policy loans are also tax-free. However, if the policy ends, taxes are due on any loans. If the insured passes away, the death benefit is decreased by any loan balance.
Get Your Free Life Insurance Quote Today
About Us
TermLifeProvider | Home of HassanHelps is a leading life insurance brokerage with the best rates from top insurers. With over 16 years, we've helped thousands save on life insurance.
We've seen many clients struggle with weight and related health issues like sleep apnea, diabetes, high blood pressure, arthritis, and heart disease. By educating our clients on how these health issues affect life insurance costs, we aim to improve their health and reduce their premiums.