Whole life insurance - How many types of whole life insurance are there?

A large number of people get extremely flustered when it comes to understanding the various options that they are confronted with while choosing a life insurance plan. Not only are there basic types of life insurance like term life insurance and whole life insurance, but each one of them has various sub categories. Unless you acquaint yourself with the various types of life insurance policies that are possible, it will be difficult to choose one that suits you best. This is because each kind of life insurance has been created to suit the various needs of the different customers. Therefore, you need to choose a life insurance company that can provide you with the most appropriate policy with a specific life insurance rate, life insurance settlement agreement and a life insurance premium that suits your requirements, stage in life and financial status.

Getting whole life insurance and term life insurance quotes from various life insurance vendors is easy. However, do you understand that there are various kinds of whole life insurance policies as well? Since we are proposing that you try and get a detailed understanding of each kind, we shall plan to focus only on whole life insurance and the kinds that there are.

Whole life insurance is a life insurance policy that is permanent. In most cases the premium paid is constant and stays the same throughout life unless you increase the life insurance to gain a higher annuity. This kind of a life insurance policy enhances your capital and provides interest that is tax deferred. A whole life insurance is flexible and if you are unable to pay the premiums for some reason, you can cancel the life insurance to obtain a lump sum amount. The face amount of the whole life insurance remains constant and this is the amount that is paid to the family or the nominee named in the life insurance policy when you die. If you want your family to avail of an annuity instead of a payment at one time, it can be arranged.

Since many people invest in a whole life insurance due to the returns that it offers along with life coverage, they start to use up the cash accumulated after a period of time. This is also mainly because of the fact that people put their money in whole life insurance as part of their retirement planning.

Agents who sell annuities and whole life insurance can tell you the various policies that exist and can guide you in specific benefits and unique attributes of each. Selling annuities also involves an understanding of competing products like health insurance and long term care insurance since customers need to compare and contrast the benefits, advantages and disadvantages of all the investment tools that they can use.

If you have decided that you would like to opt for a whole life insurance, a financial consultant can help you understand the various kinds that exist. For some general understanding about the kinds of whole life insurance that exists, please consider the following:

Non participating whole life insurance - The death benefits, cash surrender and premiums are decided at the time when the life insurance is taken out. This means that the life insurance company is responsible for paying the sums that have been promised irrespective of the performance of the life insurance company.

Participating whole life insurance - Also called par life insurance policy, in this case, the life insurance company shares the dividends that it gains with the customers. If the life insurance company has performed well, the customer stands to gain. But the opposite also applies.

Intermediate premium whole life insurance - This policy is like the non participating policy. However, in this case the premium varies from year to year subject to a maximum.

Economic whole life insurance - This policy was created by mixing term life insurance and participating whole life insurance. It has a high death benefit but relatively lower annuities if the money is withdrawn.

Limited play whole life insurance - This policy is again similar to a participating whole life insurance. However, in this case, the premiums are not applicable for life. The premium is paid for a certain number of years and it is decided that the monies shall be returned in the form of a full payment or annuity at a certain age.

Single premium whole life insurance - This life insurance policy allows you to give only one large single premium. It can be used when someone comes across an inheritance.