Types Of Whole Life Insurance

1220 WordsAug 20, 20155 Pages
Types of Whole Life Insurance As I mentioned a few paragraphs ago, I’m using whole life as a blanket term for an entire category of insurance products, which some agents refer to as permanent life or universal life. I like the term whole because it fits well with my approach to investing, which is, if I may be permitted the phrase, holistic. I’m concerned with all of you—your mind, your emotions, and your overall state of being. In the following section, I’ll review the fundamental characteristics of this class of insurance products, then briefly discuss some of the variations therein. Basic Facets of Whole Life Insurance: • Fixed Premiums: With some notable exceptions, your premium is set when you buy the policy, and will not change…show more content…
• Participating and Participating Whole Life: Participating and Participating Whole Life policies are special types of permanent life insurance policies wherein the policy holder is paid a regular dividend from the insurance company, similar to that which a stockholder might receive. These dividends can be used to pay policy premiums, they can be redirected into the investment portion of the policy, or they can simply be kept—the policy holder decides how he or she wants to use them. Participating and Participating Whole Life policies are generally less complex than universal policies, since the premiums are almost always fixed. With variable and participating policies, the death benefit may grow or shrink, but there is almost always a guaranteed minimum payout. TIP: The ins and outs of universal and whole plans are very complex, and need—no, MUST—be discussed with a qualified life insurance agent. Comparison of Investments By now I hope you’re convinced about the value of whole life insurance as investment tool. The proper use of a whole life policy can put you on a path to financial security and wealth creation. But in case you aren’t convinced yet, I’ll take a moment to compare an investment in a whole life policy with other investments. I’m going to keep it simple, though. I don’t want to throw a bunch of numbers at you and talk about

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