6 Tips You Must Know About Whole Insurance

Introduction

Whole life insurance is insurance which incorporates insurance and investment. The insurance aspect is that you are covered for life, and there will be a payout when you die. The investment aspect is that policyholders have the opportunity to borrow from accumulated cash that is included in the insurance policy and you can also borrow against it.

Step 1

Unlike a term life insurance policy, where insurance is only for specific time length, whole life insurance is for your entire life as long as you keep paying your premiums.

Step 2

There are seven different types of whole life insurance, each with their own characteristics.

• Non-Participating whole life insurance: This is a policy where all the particulars are decided upon on the onset of the policy and usually they cannot be changed at a later date.
• Participating: This type of insurance pays dividends to its policyholders, meaning if there is a surplus of resources this is divided out to the company's policy holders.
• Indeterminate premium: This pays no dividends and the cost of the premium payments will vary, however it will never exceed the principal premium amount.
• Economic: This offers a death benefit to your benefactors and also dividends which can be added to your overall death benefit so that when you die your loved ones will get a larger sum of money.
• Limited pay: This is when premium payments are only charged for a specific time interval, instead of your whole life.
• Single premium: This is where the policy holder will pay a single large fee up front and have whole life insurance for the rest of their life.
• Interest sensitive: This I where the interest on the cash reserves of the policy vary in accordance to the market.

Step 3

Find out as much information as you can about the different types of whole life insurance and also the specific organisation that you are contemplating getting your policy with. This task can be achieved through searching the Internet and researching different insurance companies.

Step 4

It is a helpful exercise to ask your friends and family for advice. Maybe they already have whole life insurance and can offer you some insightful information pertaining to the traits of this insurance and whether or not it would suit your insurance needs.

Step 5

Find an insurance company that is financially stable to avoid any adverse situations that could arise in the future. This can be observed by examining their credit ratings, standard and poor is one agency that could aid in this task. If they have a poor rating it may be a good idea to look elsewhere for your whole life insurance policy.

Step 6

Ask lots of questions when you meet with your insurance officer to ensure that you find the right policy that corresponds to your particular needs. Also ask for their credit ratings, to judge the stability of the establishment.

Tips

1. Whole life insurance is a practical choice because it is constant coverage for the rest of your life.
2. Be aware of the different types of policy's out there so you can find the right one for you.

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