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Whole Life Insurance: Different Types

Life insurance companies such as Minnesota Life Insurance offer a variety of products including whole life insurance.  The wide array of choices can be overwhelming especially when there are so many options.  Whole life insurance specifically has six traditional forms as defined by the state of New York.  These types include:

  • Non Participating
  • Participating
  • Indeterminate Premium
  • Economic
  • Limited Pay
  • Single Premium
  • Interest Sensitive

While each category carries its own set of unique differences, in general all whole life insurance policies carry the same stipulation.  Most whole life insurance policies require that owners pay premiums for the life of the insurance policy.  Under certain arrangements the policy can be paid up which means that payments will no longer be required.  Many companies guarantees that the policy's cash value will go up no matter what happens with the company or market.  Cash values are usually considered liquid enough to be investment capital but this will happen only if the policyholder is financially strong enough to continue making premium payments.

Whole life insurance is a different concept from traditional term life insurance policies.  It was developed as a way to satisfy consumer concerns since many policyholders were frustrated that they were paying into a policy for decades with potentially no return.  Whole life insurance premiums are level and generally higher than term life insurance payments.  This type of plan gives a benefit to the consumer as well as the insurer since by guaranteeing a death benefit, the policyholder has peace of mind, while the insurer is receiving higher premiums with higher profits.  Meet with a financial expert to determine what type of policy would work best for you.

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