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For 'The Whole' of One's Life
Born as a result of the negative aspects of yearly renewable term where premiums rise each year, Whole Life (WL) offered - and still does - a levelized premium over the insured's lifetime. WL is a very simple straightforward concept: Over pay a level premium in the early years to compensate (or offset) the higher costs in the latter years. The majority of cash value oriented policies issued prior to 1977 was of the whole life variety.
Three Types of Whole Life
Generally, there are three (3) types of WL policies: Single Premium, Limited Pay and Ordinary Whole Life.
Single Pay is exactly that single pay, single deposit. Under a single pay plan, the policy owner makes a one-time deposit versus annual or other periodic payments.
Limited Pay Plans are designed to cut off after a certain number of years (payments or age), say 10 or 20 years or age 65. Under a Limited Pay option, the owner must pay a slightly higher premium than if he or she were to pay over their lifetime. These dollars, however, are not lost. Instead they simply accrue as extra cash value within the policy.
Ordinary Whole Life is of the continuous pay fashion whereby the owner pays into the policy over his or her lifetime at the lowest rate (cost) possible.
Although the purchases of WL policies have sunk dramatically low the last 20 years and most experts, ourselves included, don't expect WL to be offered to the general public within 7-9 years, WL still possess some excellent advantages.
For example, unlike some other forms of insurance, it is permanent, the premium cannot change and cash values accrue at current rates and a guaranteed minimum contractual rate.
These policy values can be accessed through loans and/or withdrawals or could be converted to an annuity payment, which cannot be outlived.
Whole Life policies can be issued under a single life, joint life or group insured arrangements.
Action To Take If you would like to learn more about Whole
Life and receive a no-obligation quote, |
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Copyright © 1998
Fielder Financial Management, LTD.
All Rights Reserved.
Securities are offered through Girard Securities, Inc.
member FINRA, SIPC.
Mark R. Fielder, Registered Principal. CA. Insurance Lic. # 0690576.
