Have you ever asked yourself, why there are so many types of whole life insurance policies out there? Have you ever wondered why new products come out year after year? You have the paid up 40, the pay by 50, limited pay, single premium, the flexible premium this, the variable that. Doesn't it all sound like jibber jabber?
Well this article is going to discuss some of the various names out there and the slight distinctions between the types.
Here are the names you might see:
- 7702 plan
- cash value life insurance
- variable universal life
- whole life insurance
- universal life insurance
- indexed universal life
Each of these types of policies is an example of a whole life insurance policy. According to
en.wikipedia.org, whole life insurance is insurance that is meant to be owned for one's entire life. The policy accumulates a cash value over time that supposedly eventually matches the death benefit. Universal life was created to allow overfunding of the policy and accumulating interest in a separate account which could later be used to pay for the cost of insurance. Variable universal life allowed the same concept with the separate account being capable of holding investments. Indexed universal life typically has principal protection with guarantees on the separate account, less adminstrative costs.
Read about some of the flaws of whole life insurance in this
earlier post. Thanks for visiting and we welcome any comments or additions to the discussion!
This post was reposted from
http://finlit.biz/life-insurance/6-names-associated-with-whole-life-insurance/, originally written on February 3rd, 2013.
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