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Term Policies
- Protection for a limited time - generally to 70
- Low initial premium, but rising with each renewal
- Level Death Benefit, unless a reducing benefit plan
- No cash values will accumulate
Whole Life Insurance Policies
- Protection continues to age 100, thus the permanent name
- Premium does not increase; may even reduce or cease
- Level or increasing death benefit
- Cash values accumulate on a tax-free basis
Universal Life Insurance Policies
- Protection continues to age 100
- Premium amount is flexible, may reduce, and could increase
- Death benefit is flexible, can be reduced if desired
- Cash value growth reflects the interest rate environment
- Policy owner may alter structure to suit future needs
Variable Life Insurance Policies
- Protection continues to age 100
- Premiums can be fixed, but are generally flexible
- Death benefit is flexible, can be reduced if desired
- Cash value growth reflects equity (stock) environment
- Policy owner may alter structure to suit future needs
- Policy owner may shift investments for diversification
Variable Univeral Life (VUL)
- Protection continues to age 100 or 104
- Premium amount is flexible, may reduce or increase
- Death benefit is flexible and may be reduced
- Cash value growth reflects equity (stock) accounts or may be fixed accounts
- Investment allocations may be altered
- Investment deposit allocations may be altered
- Policy owner may alter structure of policy to fit future need
- Premium deposits may be withdrawn on a tax free basis
- Loans may be taken based on policy values, subject to limitations and then current interest charges and credits
Participating Insurance Policies
Policies are written by mutual (and a few stock) companies in such a fashion as to permit the gains from investments, mortality and operating efficiencies to be passed on to the policyowner. |
