* If your family does not have a lot of money saved.
* If you are a stay-at-home parent.
* To cover the mortgage or other large shared financial commitments.
The different types of whole life insurance policies you may choose from.
To help you choose the best whole life insurance, you may first need to know more about the different types of whole life policies you can choose from.
Level Premium Whole Life Insurance:
This whole life policy features premium payments that are:
* level.
* are required to be paid as long as the insured is alive.
In the early years the premium is more than enough to pay the current cost of insurance security. The surplus makes up the insufficiency of premiums in later years when the annual premium is not sufficient to pay the yearly cost of insurance. These extra premiums are held and invested by the insurer. This creates the cash value of the policy.
Indeterminate Premium Whole Life Insurance:
This type of whole life policy is similar to an ordinary whole life policy save for it providing adjustable premiums. The company will charge a premium based on its current estimate of expenditure, investment income and mortality. The company will adjust the premium in view of these estimates changing in later years. It will never be adjusted above the maximum guaranteed premium declared in the policy contract.
Single Premium Whole Life Insurance:
Single premium whole life is a limited payment whole life insurance policy with one quite large premium payment payable at issue. The policy is fully paid up and no further premiums are necessary. Owing to the single premium payment the policy will have an immediate cash and loan value. This could be considerable depending on the sum of the single premium payment.
Limited Payment Whole Life Insurance:
This whole life policy gives you life insurance protection but involves only a limited number of premium payments. The premium payments will be higher than with an ordinary whole life policy since the premiums are paid over a shorter timespan. Limited payment plans can provide for the payment of premiums for a set number of years such as 20 payment whole life insurance.
Participating Whole Life Insurance:
This whole life policy pays dividends corresponding to:
* the positive experience of the company.
* results from surplus investment earnings.
* favorable mortality.
The dividends may be:
* paid in cash.
* used to decrease your premium expenses.
* left to build up at a particular rate of interest.
* used to buy paid-up supplementary insurance.
Non-Participating Whole Life Insurance:
A non-participating whole life policy has a level premium and a fixed insured amount during your entire life. However, this policy does not pay out any dividends.
You may contact your insurance broker or a life insurance company for more information about the best whole life insurance for your personal life insurance needs.
