Economic Whole Life Insurance

There are seven main types of permanent life insurance. These include non-participating, participating whole life insurance, indeterminate premium, economic, limited pay, single premium and interest sensitive. Each type has their pros and cons, so do your research before selecting one type. Economic whole life insurance is a type of insurance policy that pays your beneficiaries a death benefit. This type of insurance covers you for your entire lifetime. It is basically a cross between a term policy and a participating insurance policy.

An economic never ending life insurance policy covers you for your entire life. A similar type of insurance is term insurance, but that only lasts a certain number of years before you have to renew it or find another policy. An "economic" type of policy gives you money back at the end of the year if the company has made profits. The money can be credited toward your death benefit so that your beneficiaries get a bigger lump sum upon your death.

Whole Life Insurance Benefit

This sounds like a favorable type of life insurance policy. However, an economic-based policy depends on the company's financial health. If the company has a bad year, you will not get any bonuses, and, in fact, your death benefit will decrease. Some people like to take this type of risk because over the long run, your death benefit will likely increase. You need to determine for yourself if you want to go with the economic policy. But how can you find out whether or not you should do this kind of policy? One way is to look at the company's grades.

There is one benefit you can take advantage of with an economic whole life insurance policy. This benefit is the cash value account, which you contribute to every month with your premium. The cash value can be used to borrow loans from any company since it acts as the collateral. The money is used like a credit line and assessed interest. An economic life insurance policy may lower your death benefit, but it does not affect your cash value. An economic whole life insurance policy requires monthly premium payments. Some policies let people pay the premium in one lump sum or in a few payments. There is usually a discount for paying the premium in larger sums. After the premium is paid off, the insured individual no longer has to make any further payments.

Life Insurance Company Grades

You should always investigate a company's history and background before signing up for any types of policies. When you get your free quotes on rates, ask the insurance agent about their past financial history. If they cannot or do not tell you, you will have to do some research on your own. Most insurance companies have a "grade" given to them by an independent review agency, who investigates the insurance company's financial health. If the company has a strong record of profit-making, then the company will give them an "A" or "B" grade.

Now that you know some of the basics about economic whole life insurance, you can decide if you want to take the risk. Compare each type of life insurance policy and what they have to offer you. This type of policy is good if you are young and healthy because you can afford to take a greater risk with your money than a senior could. Your death benefit could increase greatly over the years, which means your family will benefit. In addition, you can start using the cash value in a few years as a line of credit or as an emergency cushion.