Different Whole Life Insurance Plans

A whole life insurance plan is a financial guarantee to your family against any potential mishaps or disaster. There are various different plans or types of whole insurance policies and often is the case, that a whole insurance overage is sought out without proper understanding of the basic fundamentals behind it. With a view to secure the best possible whole life insurance plans at the cheapest possible rate, let us review the six major whole life insurance variations out there in the market.

 

1.Non-Participating: - This is the most simple and risk free plan where all the future liabilities are determined by the insurance company at the time of agreement. The insurance actuaries determine the death values, cash value and the premium rates of the plan and they cannot be altered once the plan is made. The insurance corporation bears the loss in case the estimate on death claim is high while it stands to make a profit it the estimate is lower than the ongoing market rate.

 

2. Participating: - This insurance plan comes with it’s own set of risk and benefits. The insurance company and the customer tie up a deal in which the premiums and the cash back benefits are decided by the profits of the company. While this may not be a suitable plan for those interested in a plain vanilla insurance coverage, a participating or at par plan is an option to look out those who are interested in availing much more from an insurance plan. It is always advisable to side with growing or established companies for this plan so that you can be assured of long-term benefits.

 

3. Intermediate Premium Plan: - An intermediate premium plan is akin to a non-participating plan expect that the premiums vary every year. However, the company lays down a guarantee that the premiums will never cross a certain ceiling value. This plan may be considered by those just starting out their professional careers and in anticipation of better career prospectus in the times ahead.

 

4. Economic Whole Life Insurance Plan: - It is a blend of whole life insurance and term life insurance, in which a portion of the dividend may be used to avail additional insurance. This can be a good option if the actual dividend in higher than the estimated one as you end up getting a higher death claim value. However, if the actual dividend turns out to be smaller than the estimated one, you will end up losing a portion of your death claim value.

 

5. Limited Pay Plan: - A limited pay plan is a great option for those looking for an insurance plan that will give them life long coverage without placing a burden in the latter years. A limited pay plan requires an individual to pay premiums only till a certain age after which he/she can enjoy dividends and life long coverage without any further payment. Those starting out early should consider this option or those with high professional incomes, as the premiums are generally high as compared to a non-participating plan.

 

6. Single Payment: - This plan requires a single one-off payment from an individual to avail life long insurance with the normal fringe benefits.  The value of this single one off payment varies according to age, past medical history and drinking, smoking and diet routines. This plan would serve good for those looking to settle their insurance payments at one go without worrying too much about future payments.

 

The vast number of options and flexibility attached to a whole life insurance plan makes them a viable option to consider for those looking for a strong financial plan that provides them insurance coverage all through their life. So, go ahead and secure your loved ones with a tailored made whole life insurance coverage