From the course: Risk Management and Insurance Planning: Designing for Client Needs
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Permanent whole life
From the course: Risk Management and Insurance Planning: Designing for Client Needs
Permanent whole life
Whole life insurance is often called ordinary life or cash value life insurance. Traditional whole life is a product of guarantees, and for a financial planner with a risk-averse client this could be the product to offer. Whole life insurance gives you three guarantees. One, the promise that your premium payments won't go up. Two, a guaranteed death benefit amount, and three, a guaranteed minimum rate of return on that cash you put into savings. Although whole life comes in many variations, we will focus on the two most common, non-participating whole life and participating whole life. First off, non-participating whole life is a policy that can be referred to as plain vanilla. It has the guaranteed features we just described. On the other hand, participating whole life has all the benefits of a non-participating policy but if you were to own this type of policy, you would expect to receive dividends if the company does well financially, and with this benefit you can expect to pay…
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