Monday, March 2, 2009

Whole life insurance types and their differences

There are many things that could happen to a person at any time. The unpredictability of life often leaves people in a precarious state of imbalance. They do not know how things are and they do not know sometimes how to deal with the unexpected things that come their way. It is often troublesome that these things happen. The fact that it is not expected is in itself a problem as people would need to adjust to it as quickly as possible. The problem is often compounded by the fact that surprises are rarely good surprises. They are mostly negative and bring about a lot of inconvenience to people. A sudden death in the family is probably the worst kind of surprise there is. Not only is it emotionally taxing, it also hurts the family financially. A person could help protect his family from this kind of inconvenience. A person can get whole life insurance to protect his family from all these financial problems that can be brought about by his unexpected passing.

Whole life insurance is an insurance policy whose term is the rest of the life of the person insured. This therefore financially secures the people for the monetary problems that may be brought about by his passing. There are different ways to pay for a whole life insurance. In most cases however, whole life insurance premiums may be paid annually. There are different kinds of whole life insurance policies as well. The six different whole life insurance policies are: non-participating, participating, indeterminate, economic, limited pay and single premium.

There are differences between these whole life insurance policies. In non-participating whole life insurance, all values related to the whole life insurance policy are already determined at the time of the issuance of the policy. This means that if for some reason, the values change during the course of the policy, the agreed upon value at the time of the issuance of the policy would still be the value that would be given.

In indeterminate whole life insurance, there is only a difference of the insurance premiums. This means that the insurance premiums could possibly vary from one year to the other. A limited pay whole life insurance policy on the other hand, limits the number of years that premiums need to be paid. In other cases, insurance premiums need to be paid annually for the duration of the policy lest one would lose the policy altogether together with the benefits of security that it brings. In limited pay, the insured needs to pay only for a limited number of years agreed upon at the issuance of the policy. This means that while the insured may need to pay only for, say 20 years, the insurance policy remains active for the duration of his life.

Whole life insurance is a smart way of protecting one’s family for the duration f your lifetime and after. These days, people should understand that people need to take care not only of their own lives, but also the lives of their loved ones.

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