Whole life insurance is a permanent policy that you buy to have continued protection for the rest of your life. Premiums are based on your age at the time the policy is issued, and as long as you stay enrolled in the policy you will be locked in to that rate. With a whole life policy, you are protected for your entire life, or until you reach age 100. At age 100, your policy has matured and you will be paid the full face value of your death benefit. There are three basic ways to pay in to a whole life policy, Straight Life, Limited Payment, and Single Premium.

Straight Life is your standard payment option. You make level payments for the life of the policy until age 100 when the policy matures. The cash value that builds during the life of the policy must begin to accumulate by the third year at the latest. Of the three basic whole life insurance policies, straight life will have the lowest annual premium.

Limited Payment is just like straight life in that it has a level premium and it matures at age 100. The difference is that you set a deadline to have all premiums paid up before age 100. This is ideal for individuals who would like permanent life coverage but do not want to be paying premiums after a certain date. Common versions are 20-pay life where coverage is paid for after 20 years, and life paid-up at 65 (LP-65) where coverage is paid for by the insured’s age 65. Because of the shorter premium-paying period, higher annual premiums are required.

Single Premium is just what it sounds like; you make a one time, lump sum premium payment at the time of signing the policy. Cash value begins is generated immediately. Most companies require a minimum premium of 5,000 or more for a single premium policy.

Give us a call or use the Request Info button for more information about your life insurance options.