WHOLE LIFE INSURANCE| UNIVERSAL LIFE INSURANCE |VARIABLE LIFE INSURANCE

WHOLE LIFE ASSURANCE | UNIVERSAL LIFE ASSURANCE |VARIABLE LIFE INSURANCE



WHOLE LIFE ASSURANCE

                                                                

We are trying to know different types of life insurance so now let's see about the whole life insurance.

Whole Life Insurance

With whole life insurance as opposed to term insurance. it has a cash value so it means that it has a savings feature to it in addition to providing you that death benefit,

So that right to cash value is canceled with policies will have unique features to them but kind of the downside is that if the policy is canceled prior to death typically the right to the cash value is forfeited.

So here's how cash value accumulates in a whole life policy so you can say this is a $200,000 policy and you can see how much death protection there is and how much cash value.

So the death protection is quite is growing up to 2 hundred thousand and therefore the cash value is really diminishing well maybe this may make it make a touch bit more sense.

So here's a whole life policy and so you see the premiums again male premiums are a little a bit higher than female premiums.

Now let's just see different types of whole life policies because it's a little bit difficult when we generalize sometimes because these instruments are so unique.

So let's talk about these three types a continuous premium whole life policy or sometimes we call it a straight life the policy has level premiums that are paid until death or once you cancel the policy now limited payment.

The whole life policy has a level premiums that are paid for just for a certain number of years so not all the way through death but the insurance stays in force until so you only pay premiums for a certain period of time and a single premium whole life the policy also has lifetime coverage.

But you just pay basically a lump the sum so the advantages of whole life are that savings vehicle that you don't have with the term and because you're saving towards this cash value you can actually, borrow against that cash value the premiums remain constant which is a little bit different from the term.

And that cash value you get a tax advantage because it accumulates tax-free disadvantages there's less death protection if you're younger it gets compared to a term life policy even however you're good the profit that you're receiving is pretty low compared to other savings vehicles.

There are tax penalties possible if you take the money out early so that savings is growing tax-free but if you borrow against that policy, you could incur a tax penalty and any outstanding a loan that you do have against that cash value is going to be subtracted from that cash that death benefit.

Universal Life Insurance

Universal Life insurance is where it starts to get even stickier because it's very similar to whole life so it provides that death protection plus the savings feature and so premiums are basically in two different accounts or allocated to do different accounts.


Universal Life Insurance

                                                                
So the savings will grow at the current interest rate versus a guaranteed minimum rate, it means you're going to get a slightly better rate than with whole life and you get some flexibility and the premiums paid.

Now what your death benefit is going to be, now you can see typical premiums on a universal life policy that has a $100,000 benefit and this is for preferred nonsmoker so this is the best available policy.


Variable Life Insurance

Now one more type of life insurance is variable life insurance and again lots of similarities between these two have death protection plus a savings or cash value feature.




Variable Life Insurance
                                                          
The cash value can be invested in mutual funds though so you can even get a greater return so that's the biggest difference between the whole life the universal life and the variable life.


And because you're investing in mutual funds the returns are not guaranteed so here again you can see the difference in premiums so just lastly some other types of insurance we just talked about variable life it combines that flexibility of the premium payment feature of universal life with the investment choices offered by variable life.

Again remember you can invest in mutual funds now group life insurance through your the employer is basically a turn policy and it has lower premiums typically than what you could get on your own some other special-purpose life insurance credit and mortgage life.

So this is typically something that you would add on to a credit card or a mortgage and so the term is associated with the length of time of your indebtedness.

So it pays off your debt if you die before that debt is repaid it tends to be pretty expensive industrial life insurance our whole life policies with smaller faith face values then they're typically for low-income families gives them some insurance.

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