Whole Life Insurance

Whole Life Insurance

Whole Life Insurance is a type of life insurance policy that falls under Permanent Insurance, which is known to be one of the two types of Life Insurance the other type is being Term Life Insurance. There are three other branches of Permanent Life Insurance namely: Universal, Indexed, and Variable Life Insurance policies.

Whole life insurance offers premiums in levels and the policy remains in force for as long as you are alive. At the time of your death, the whole life insurance will pay a lump sum amount to your beneficiaries.

Whole life insurance was produced as a response to market pressure since life insurance was originally only temporary or what is now termed as Term Life Insurance. Therefore, actuaries came up with whole life insurance to include level contributions and last a lifetime.

Several types of whole life insurance policies exist today and they include single premium, indeterminate premium, non-participating, participating, economic and limited pay. There is also a new type called interest sensitive whole life insurance. However, not all insurance companies offer all these packages and their definition varies from company to company.

One major benefit of having a whole life insurance policy is that if you take a longer saving period, you will only pay low premiums and your returns will even be higher. The other benefit of taking the whole life insurance policy is that it assures you of financial security because should you decide to cancel the policy halfway, you can claim the full amount of money you have contributed so far.

Again, unlike term insurance, whole life insurance guarantees a certain amount of money after your death. For term insurance, once the period of agreement is over, there is no payment made to you as the contributor thus ending up as a pure loss on your side. Facts have it that insurance companies have paid not more than 3% for term insurance policies making this policy a financial venture for the companies and a total loss to majority of the customers.

Whole life insurance also provides several benefits depending on the insurance company with some companies having up to 4% annual guarantee inclusive of dividend. Basically, whole life insurance is viewed to be a ways of making savings that are not taxable because withdrawals from whole life insurance policy are considered to be policy loans and non-taxable.

Requirements for whole life insurance policy membership are similar in almost all the insurance companies but they may have slight variations on the amount of premium. Some will allow the contributor to make one large contribution and no other after that to cover the whole lifetime, while others will agree on a said amount to be broken down either throughout the contributor’s life or for a number of years.

Related Links:

Whole Life Insurance Quotes

Permanent Life Insurance

Top Whole Life Insurance Companies

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