Compare Whole Life Insurance

Whole Life Insurance remains in force for the insured’s entire life and usually requires premiums to be paid yearly into the policy. Our specialists at Michael Whitaker and Associates have compiledthis list of whole life insurance comparisons by type to help you to determine which is right for you. Below are the common types.

 

Non-Participating

All policy values are usually determined when the policy is issued, cannot be altered after issue, and remains guaranteed for life. The company assumes all risk of future performance versus the actuaries’ estimates. If claims filed in the future are underestimated, the company makes up the difference. If the actuaries’ estimates on future death claims are greater than the company expected, the company will keep the difference.

 

Participating

The insurance company shares in the extra profits. These profits work like dividends. Typically these “dividends” are not taxable because they are considered an overcharge of premium. If the overcharge is greater than what the company expected, they have to make up the difference. If it is less, the company makes a profit.

 

Indeterminate Premium

It is similar to non-participating, but that the premium may change year to year. The premium will never be greater than the maximum premium guaranteed in the policy.

 

Economic

Is a blend of participating and term life insurance, where a part of the dividends is used to buy extra term insurance. Usually this gives higher death benefit, at a cost to having more cash value built up in your policy. If the dividends are below projected some years, the death benefit may decrease.

 

Limited Pay

This is similar to a participating policy, but instead of paying annual premiums for life, they are only due for a limited number of years like 20. The policy may also be structured to be paid up at a certain age, like 65.The policy itself continues for the life of the insured.

 

Single Premium

A form of limited pay, where the premium is a one-time large payment up front.

 

Interest Sensitive

A blend of traditional whole life and universal life. Instead of utilizing dividends to build cash value accumulation, the interest on the policy’s cash value can change with conditions of the market. Death benefit remains constant for life. The premium payment can change, but never larger than the maximum premium that may be charged.

 

Final Expense

Typically used to pay a small amount of death benefit anywhere from a couple thousand dollars, to fifty-thousand dollars. The underwriting is more lenient, but the cost per thousand is higher. There are “guaranteed issue” policies available. Some may have what is called “graded”. This means the full death benefit will not pay unless the insured lives for a certain number of years first.

 

For more complete information about whole life insurance comparisons, please contact us today for a free consultation.