A whole life insurance rate may vary from company to company.
Some companies market more than one whole life type policy
Let us examine why there is such a disparity in whole life insurance rates and why the life insurance companies create policies the way they do.
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Differences In Whole Life Insurance Rates
Although all life insurance companies are using the same mortality tables there is a vast difference in the whole life insurance premium rate one company will charge compared to another.
Let us make one thing absolutely clear, all things being equal, the lower the premium the lower the cash value, The higher the premium the higher the cash value…
To put it another way, if the expense and investment experience of two life insurance companies are very similar and one charges a higher whole life insurance premium than the other the cash values of the higher premium policy will be more than the other.
The reason is that the company that charges the higher premium has more to invest thus returning more to their policy owners. The company that charges the higher whole life rate will usually pay a higher dividend as well. As you can see there is no big mystery to it.
The only big question is how far they can go and still maintain a competitive product. Some life insurance companies make the premiums so high that the consumer begins to balk.
When they become aware of what is happening they turn against whole life insurance with such anger that they don’t want to hear anything about permanent life insurance ever again. All these people want is term life insurance …
The thing that these people will probably never be aware of is that there are life insurance companies who charge a pretty low whole life insurance rate and still return a decent cash value and dividend to the consumer.
These companies employ some of the smartest investment experts in the industry. In the long run they usually come out ahead of the rest.
The creation of the universal life insurance policy as well as the variable universal life insurance policies gave the policy owner some control over the amount of premium paid into their life insurance policies.
As these policies are term insurance based the amount of premium applied to death benefit is minimal. They also allow you to increase or decrease your investment at your pleasure. The premium rates are not fixed…unlike the whole life insurance rate.
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