Unlike term life insurance whole life insurance is a permanent
life insurance policy that when purchased lasts the duration
of your whole life or as long as your premiums are paid. Sometimes
premiums are paid on a monthly basis, but most often they
are yearly premiums.
Whole life is a benefit for both holder and insurer alike.
For the policy holder, it assures that there will be a death
benefit paid after the insured dies. It also removed the necessity
to renew contracts and re-qualify based on age. Once in place,
a Whole Life Insurance policy cannot be revoked, unless the
premiums are defaulted. For the insurer, the risk is decreased
every time a premium is paid, because a portion of those premiums
is set into a death benefit account to be used when the policy
holder dies.
Fixed Premiums
The premiums for Whole Life Insurance policies are generally
fixed and the amounts are determined by age and health when
the policy is acquired. The older you are when the policy
is purchased, the higher the premiums will be. Some insurance
companies offer the option of one-time payments, where you
can purchase a policy outright, without annual premiums and
some offer initially high premiums, so that the policy will
be paid off within a shorter period or term, usually 15 years
and then no more premiums are required to maintain the policy.
Types of Whole Life Policies
There are six different types of Whole Life Insurance policies
that can help customize a plan for everyone. Choosing the
right policy can be difficult, but OnlyInsuranceQuotes.com
can help. You can receive whole life insurance quotes within
minutes by simply filling out the form at the top of this
page.
Understanding the different types of policies can also help
you to make the best, educated decision possible once you
receive a cheap Whole Life Insurance Quote that you are interested
in. Rates vary according to the policy you choose as well
as other determining factors like age and health status.
Non-Participating
Non-participating Whole Life Insurance basically takes the
risk away from the policy holder and places it with the insurance
carrier. If the policy does not generate enough premiums before
the death benefit is paid out, then the insurance company
will make up the rest.
Participating
With Participating Whole Life Insurance, the insurance provider
would share any amounts paid into the policy that are in excess
of the actual cost with the policy holder. This overage is
paid in the form of a dividend and is typically not taxed
because it is considered an overpayment.
Indeterminate
The only difference between this type of Whole Life and Non-Participating
is that Indeterminate insurance allows for a variable premium
from year to year that could potentially change every year.
Economic
Economic allows for the remainder or dividends from a Participating
policy to be carried over to purchase additional insurance.
Limited Pay
A Limited Pay policy is set up to be paid off in a limited
amount of time. The policy holder would pay premiums for 15
or 20 years and then the policy would be active and available
with no additional payments required.
Single Premium
Much like a Limited Pay Policy, the premiums are consolidated
into one lump-sum payment and then the policy is active and
available for the whole life of the policy holder without
the need for additional premiums. |
