Whole Life Insurance Advice

Modified And Non Participating Whole Life

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Allow me to give you some whole life insurance advice. Some people opt for whole life insurance because of the cash value that you can receive when you surrender your policy. At some point the cash value, including dividends, that you get from some of the better carriers will equal or come close the the amount of premium paid.

With some companies this may take about 12 years, others 20 years or longer. A few of the giants achieve that in less than 12 years. With a non participating policy you may never really get to a break even point. Which type of whole life should you buy?

• Non Participating Whole Life

  My favorite whole life policy is the non participating whole life policy simply because it costs less and I have a policy for the rest of my life even if I live to age 100. If I get to a point where I feel I no longer need any coverage I can surrender it for it's cash value.

  Let us suppose I get to the 20 year point and I have put $20,000.00 in total into that policy. My cash value is, let us say, $15,000.00. The difference is $5,000.00. I look at it this way, it has cost me $5,000.00 for 20 years of coverage, that is a cost of $250.00 per year.

• Modified Whole Life

  There are modified whole life policies that can achieve results as the non par policies. If these modified policies are participating they may have premiums that are lower than the non participating policies and equal or better cash values. How do they do that? Part of your premium goes to term life insurance from the outset. The term portion is replaced by paid up additions purchased by the dividends each year.

  Choose modified life policies from the larger well established companies as dividends are not guaranteed.

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