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Whole Life Insurance
Establishes Cash Value
Whole life insurance covers you for as long as you live and your
premiums are paid.
There are two major types of whole life insurance policies
Non Participating Policies
All values related to the policy (death
benefits, cash surrender values, premiums) are
determined at policy issue, for the life of the
contract, and cannot be altered after issue.
This means that the insurance company assumes
all risk of future performance versus the
actuaries' estimates. If future claims are
underestimated, the insurance company makes up
the difference through its reserves.
Participating Policies
With a participating policy, the insurance
company shares the excess profits (dividends)
with the policyholder. The greater the success
of the company's performance, the greater the
dividend.
Limited payment whole life insurance contracts
emphasize savings more than straight life
insurance contracts. They make it possible for
the insured to stop paying premiums at a certain
period without any reduction in the face amount
of the limited payment whole life insurance
contract.
You generally pay the same amount in premiums for as long as you
live. When you first take out the policy,
premiums can be several times higher than you would pay initially
for the same amount of term
insurance. But, they are smaller
than the premiums you would eventually pay if you were to keep
renewing a term policy until your later years.
"Straight life", "ordinary life",
and "continuous premium life" are terms used
synonymously with the first type of whole life insurance
contracts. The second type of contracts are
termed "limited payment " contracts.
Both promise to pay the face death benefit amount upon
death. The major difference between these two types of
contracts is the premium
payment period.
Some whole life insurance policies let you pay premiums for a shorter period such as 20 years, or until
age 65. Premiums for these policies are higher since the
premium payments are made during a shorter period.
Cash
Values
If you stop paying premiums on your policy you
can take the cash - or you can use the cash value to buy continuing
insurance protection for a limited time or a reduced amount. (Some
term policies that provide coverage for a long period also have cash
value.)
You may borrow against the cash value of your policy.
This may be achieved by taking a policy loan. Any loan and interest on
the loan that you do not pay back will be deducted from your
benefits if you die, or from the cash value if you stop paying
premiums.
Cash values are considered liquid. The
cash value in the policy can to be
used for investment capital, but only if
the owner has the capacity to continue
making premium payments. Cash value
access is tax free to the point of total
premiums paid, and the remainder may be
accessed tax free in the form of policy
loans. If the policy lapses, taxes would
be due on outstanding loans.
The policy guarantees a death benefit and guarantees a
cash values. It establishes a known, fixed annual
premiums. The premiums in this type of
policy are not flexibility.
CONTINUE HERE FOR MORE INFORMATION ON
THIS TYPE OF POLICY>
TermLifeAmerica.com-
Lewis Fink is licensed as an insurance agent
offering Life Insurance in the following states:
Alabama - AL,
Arkansas - AR,
California - CA,
Colorado - CO,
Connecticut - CT,
Delaware - DE, District of Columbia - DC,
Florida - FL,
Georgia - GA,
Idaho - ID,
Illinois - IL,
Indiana - IN,
Iowa - IA,
Kansas - KS,
Kentucky - KY,
Louisiana - LA,
Maine - ME,
Maryland - MD,
Massachusetts - MA,
Michigan - MI,
Mississippi - MS,
Missouri - MO,
Montana - MT,
Nebraska - NE,
New Mexico - NM,
New Jersey - NJ,
New York - NY,
North Carolina - NC,
North Dakota - ND,
Ohio - OH,
Oklahoma - OK,
Pennsylvania - PA,
Rhode Island - RI,
South Carolina - SC,
South Dakota - SD,
Tennessee - TN,
Texas - TX,
Utah - UT,
Vermont - VT,
Virginia - VA, and
Wisconsin - WI.
Not all insurance products from all insurance companies are available in
all states.
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