Non-Participating Whole Life Insurance
Non-participating whole life insurance offers a flat premium and face amount for your whole life. Its main selling points are the set expenses and minimal out-of-pocket premium payments that come with this type of coverage. As the insurance is non-participating, you will not receive any dividends.
Participating in Whole Life Insurance
The benefits of having a fully-involved whole life insurance policy are numerous – among these is the possibility of dividends that may be paid out, depending on the success of the company. Excess investment returns, fortunate mortality, and expenditure savings all contribute to these dividends.
You can get dividends in cash, cut your premium payments, keep them in your account, or use them to buy paid-up supplementary insurance that will enhance your face amount of coverage. You can’t, however, consider these dividends to be guaranteed.
Level Premium Whole Life Insurance
You must pay the premiums for level premium whole life insurance for the rest of your life. Early on, premiums are sufficient to cover the present insurance costs. In subsequent years, when the yearly premium is not enough to cover the annual insurance cost, the surplus, including interest profits, compensates for the shortfall. The policy’s cash value derives from the insurer’s investment in the excess premiums.
Limited Payment Whole Life Insurance
Whole life insurance that needs only a few premium payments over a short period is known as a limited payment whole life policy. Premium payments will be greater than in a traditional whole life plan because of the shorter period during which they are made.
Whole life insurance premiums can be paid in installments over a certain period, such as ten or twenty years, in the case of limited payment plans. Age-based limited payment options can also be available, such as full life paid up at 65 or 85.
Single-Premium Whole Life Insurance
The term “single premium whole life” refers to a life insurance policy with a single, hefty premium payment made at the time of purchase. No further payments are due on the insurance, as it has already been paid in full.
If you pay a single premium, the insurance will have a large amount of immediate cash and loan value. Because of the large single premium payment, this form of the whole life insurance contract may be considered more of an investment-oriented program.
Indeterminate Premium Whole Life Insurance
Adjustable premiums are available in an indeterminate premium whole life policy. A “current” premium will be charged based on the company’s current estimate of investment profits, mortality, and expenditure expenses. If these projections change, the business will modify the premium proportionally – but never more than the maximum guaranteed premium indicated in the policy.