Most organizations sell the five basic types of
whole life insurance. Keep in mind that life insurance should be purchased
from an established and reliable organizations because you pay in the
present and expect protection long into the future.
Stock term life insurance companies
Stock whole life insurance companies are
profit-making firms owned by stockholders who are not necessarily
insurance policyholders. plan s are usually sold as "nonparticipating"
variable life insurance, meaning they do not earn policy dividends for
policy holders.
Mutual corporations
Mutual companies are owned by the term life
insurance policyholders. Mutual companies sell "participating" policy
which means that dividends may be paid to the policyholder. These
dividends are a result of corporations charging too high a premium rate
for a particular year. Investment earnings of firms may be higher than
expected or companies expenses could be less than planned. Dividends may
be taken as cash, applied to the following year's premium, used to
purchase paid-up additions to the insurance policy, or left to accumulate
interest to add to the cash value of the policy .
Professional, Fraternal and Religious corporations
Professional, fraternal and religious corporations
operate in a different state from which you live. Usually all business is
done through the mail without the services of a local agent. Costs may
seem low but the counseling advice from the agent is missing. It is wise
to write for a specimen contract of the policy and examine it carefully
before purchase.
Check with the State Insurance Commissioner's office
to see if the firms is licensed in your state.
insurance may be purchased as an individual
insurance purchase from a companies agent or through a group plan where
you are a member of that group.
Individual whole life insurance
Individual term life insurance sold as an individual
purchase from a firms agent offers term, whole life, limited payment and
endowment type policies. Medical examinations are usually required before
coverage is issued. A certificate called a policy is given to the
individual as proof of being insured.
Group variable life insurance
Group insurance is generally offered as variable
life insurance through the group from an life insurance companies and
requires no medical examination. Premium costs are lower in a group plan
because there are fewer operating expenses. As the employee leaves the job
or retires, the protection ends. It is sometimes possible to convert the
term group policy to a permanent form of variable life insurance, if done
within 30 days of leaving the group.