In general many people assume that affordable whole life insurance is a waste of money. They consider it an unnecessary expense for an insurer to offer. They may even think that it is impossible to find an affordable policy. The truth is, there are literally hundreds of different companies that offer whole life coverage, yet not all whole life policies are the same. This post will focus on more common non-cash collecting life insurance products. Variable life policies include: Universal Life Insurance, Variable Universal Life Insurance, and Variable Universal Life Insurance policies.
When comparing affordable whole life insurance rates and quotes, it’s important to note that term life is an affordable solution. The reason for this is that you only pay premiums according to how long you are covered. That means that if you live longer than the stated “Term Life” limit, your death benefits do not increase. Conversely, if you choose the “No Adjustable Life” option, your premium payments stay the same no matter how long you live. As you can see, an affordable whole life insurance policy is very similar to a variable universal life policy.
Many individuals purchase affordable whole life insurance policies that include accidental death, health as a risk option, and final expenses coverage. Accidental death is usually viewed as a means to an end. However, if you die due to an illness or accident, your beneficiaries will be compensated for their losses. Health as a risk option means that your beneficiaries may not necessarily receive any payout unless they choose to pay out of pocket costs for your medical care. Final expenses coverage will payout your beneficiaries for funeral costs and other out-of-pocket expenses.
As previously mentioned, affordable whole life insurance policies build cash value. Cash value is money that you pay up front for a benefit. Most policies will let you accumulate interest, putting it in an escrow account. If you should die while still covered by the policy, your money grows in an account that matches your premium payments until such time that it is ready to use.
As previously mentioned, most policies let you add deductibles for your premium payment. You can also purchase optional riders to protect your cash value and the proceeds from optional features. For example, you can buy guaranteed renewable term, guaranteed renewable annuities, or an adjustable universal life policy. Depending on what features you choose, your affordable whole life insurance policy can have a variety of benefits including:
It is important to understand the difference between variable and permanent coverage. The former pays out benefit amounts periodically, while the latter guarantees coverage for the life of the policy. Some people prefer the static whole life insurance online because they want coverage amounts that are set annually. Others like the flexibility provided by the variable policies.
Another aspect to look for when comparing affordable whole life insurance online is the cash surrender value and the underwriting process. Because the policy holder is responsible for paying premiums and making monthly premium payments, this aspect is particularly important. Insurance companies that don’t use proper underwriting may not be as financially sound as those that do.
Lastly, you want to make sure that the life insurance company doesn’t sell the policy for a lower price than it is worth. Most often, this means looking into the past performance of the company. Past performance is indicated through dividends and longevity. Insurance companies with the best histories of dividends mean that their stock prices are likely to increase over the long run. On the other hand, companies that haven’t paid their dividends for several years are risky and could disappear in a relatively short amount of time.