Whole Life Insurance

Important Facts About Whole Life Insurance... And How To Tell If It's The Right Insurance For You!

Whole life insurance will provide you with insurance coverage throughout your life at rates that remain static even as you age. How does it work? Initially, while you are younger, your policy will cost a little more in annual premiums than the cost of insuring your life.

As you get older and the risk on your life becomes greater, the level premium on your whole Life Insurance Policy will become less than the cost of insuring you. These level premiums will build up reserve funds that will be used to insure you are you grow older. This is also called the 'cash value' of your policy.

There are several different types of whole life insurance for example:

* Joint whole life insurance

* Last survivor whole life

* Universal

* Adjustable

* Indeterminate premium life

* Variable

To get started in our understanding of whole life insurance, let's have a look at the first five options.

Joint whole life - This is basically whole life insurance cover but it differs from the typical policy in that two lives are insured under one umbrella. If one person dies the benefits are paid to the surviving individual. This person can then choose to buy an individual policy and is guaranteed insurance.

Last survivor whole life - This type of whole life insurance policy is ideal for married couples who own property together. In this case the cover is paid out when both spouses have died to cover estate taxes. This is because federal estate taxes are not due for property left to a spouse but may be due once he or she has died.

Universal whole life insurance - Universal coverage allows you to choose the premium you want to pay and the policy's face amount. The insurer will provide you with both minimum and maximum amounts that are allowed to provide adequate protection but after that it's up to you.

Adjustable whole life insurance - This is a flexible policy that allows you to change your insurance coverage according to your needs. Typically you can choose the face amount and premiums you want to pay. There are a variety of options linked to adjustable coverage - for example it could take the form of a term policy or a limited payment option.

Indeterminate premium life - This kind of whole life insurance makes use of two specified premium rates namely a guaranteed maximum and a cheaper rate you pay. Lower premiums are set for a specified period, after which the insurer will set a rate which is either higher or lower than the premium you paid initially.

In addition to the many types of whole life insurance available, there are also several ways that premiums can be paid. We suggest making an appointment with your insurance broker to determine which kind of whole life cover suits your needs best. In general whole life cover is suited for long-term benefits such as taking care of remaining spouses or making sure your have enough money for retirement.