Did you know that whole life insurance falls under the broader umbrella of permanent life insurance? With so many terms, policies, and riders, learning about life insurance can be a bit confusing. In this episode, we’re continuing our breakdown of various insurance products to help you understand the distinctions and feel more confident when evaluating your options.

Whole Life Insurance: Features, Dividends, and Best Fit (00:02:26 - 00:06:37)

·  The first question you may have is, What is Whole Life insurance? You may get it mixed up with permanent life insurance, but it is actually a subcategory of it. To help avoid confusion, just remember that “permanent” means it is designed to stick with you for life.

·  Whole Life insurance provides guaranteed premiums, guaranteed cash value, and a guaranteed death benefit. 

·  Some policies may also pay dividends through mutual companies. These dividends can be used to grow your cash value or increase your death benefit, even though they are not guaranteed.

·  People often choose Whole Life because they want long-term financial security with steady, low-risk growth.

Managing and Reviewing Whole Life Policies (00:06:38 - 00:13:39)

·  It’s important to review your policy regularly. Every couple of years, check things like policy loans, tax implications, and payout structures. 

·  Life insurance policies can change due to new laws, and companies often introduce new features. Regular reviews help ensure your coverage still matches your life circumstances.

Universal Life: Types, Risk, and Customization (00:13:40 - 00:21:14)

·  Universal Life insurance has three main types: 

o  Current Assumption Universal Life

o  Indexed Universal Life (IUL)

o  Variable Universal Life (VUL) 

·  Each type comes with its own features, risks, and growth opportunities. Current Assumption UL provides low-cost long-term protection linked to prevailing interest rates.

·  VUL lets you invest in market-based subaccounts, offering higher potential returns but also higher risk. 

·  IUL, which has become very popular, limits both the upside and downside of market returns, giving a mid-risk option with flexibility in how your money is allocated each year.

Permanent Life for Business (00:21:15 - 00:29:15)

·  Life insurance can help fund buy-sell agreements, cover buyouts, or ensure a smooth business transition if a partner passes away. 

·  Term insurance may be enough for short-term needs, while permanent insurance works best for those seeking both lifetime coverage and value accumulation.

“Whole Life is appealing because interest rates were declining, as its general account holds many bonds purchased years ago. Over time, in a declining interest rate environment, Whole Life can look very attractive.” - Kurt.