Lowest whole Life Premiums

There are many difference factors in determine the lowest whole life premiums.

 If you were to investigate the purchase of a basic whole life policy you would need to determine three foremost factors that must always be considered; the first is the amount of coverage, and second is length of term coverage, and third is cash value appreciation. With these three factors you can obtain a basic whole life product to fit your needs.

First the amount of coverage is an important factor because the premium for a $10,000 policy is going to be completely different then the premium for a $100,000 policy. Usually the larger the amount of coverage the higher the premium.  Of, course there are exceptions to this general rule.   Some exceptions are that a policy that is a graded or rated will have a higher premium than a policy that has preferred or standard rating of the insured.  Many people use Whole life policies as final expense policies to assist the beneficiary with funeral costs of the insured.

Which means that a person with a $100,000 preferred rating policy will pay considerably less than a per with a $10,000 policy that is graded due to the insured being a higher risk due to illnesses or operations incurred or the amount of medications that have been prescribed.

The Length of term is another important factor because depending on the company a 10 year policy may be less expensive than a 30 year policy for the same amount of coverage. However a 15 year policy may be more expensive for a young person than a 30 year policy. Insurance companies take into consideration the age of the insured and their mortality rate when determining the premium charged to the insured.

There are Whole life policies that are not term policies and last until age 85 or 100 or age 121. The length of term is determined by the company providing the policy. The length of term of a whole life policy is generally the insured’s whole life. This type of whole life policy is more attractive to people as they get older because they utilize the cash value appreciating in the coverage.

The mortality rate is basically the chance of death of an individual based on multiple factors such as age, health, income, etc. These rates are determined by actuaries. The used to determine these rates to age 100 but now they are rated to age 121 due to the longevity of people now. With the advance of health care and food processing people are living longer therefore the longevity rate is longer for insured’s in this country than it used to be 25 years ago. Thus this assists in determining the lowest premium for a whole life policy.

Cash Value Appreciation may be the most important factor in whole life policy coverage.  The reasoning for this is that cash value determines how much money is building up in the policy. Whole life policies are used to have cash value for retirement age persons.  These insured’s utilize the cash value to supplement their retirement income if necessary.   Cash Value is money that can be borrowed from the policy after several years of coverage. The longer the policy length the more the cash value appreciates and therefore, the more cash in the account to access prior to maturity. This cash value can be borrowed against the benefit amount by the insured. The insured has the option to pay the amount borrowed at a low interest rate or not pay it back at all and the amount borrowed is deducted from the amount of coverage. Thus the beneficiary would get a reduced benefit based on the amount borrowed against the coverage amount.

Graded whole life policies are generally more expensive than preferred or standard whole life policies because graded policies take into account that the insured is on medications or has had a catastrophic event occur such as cancer, heart issues, or other body ailments.  These policies are appreciated by the insured since it provides coverage with a cash value that may be denied by term life or universal life policies.

In conclusion, there can be many different factors that determine the lowest Whole life insurance premium, so it is imperative that a person looking for a low premium must take into consideration the amount of coverage, the length of coverage, their health, their age, their rating, whether they want a medical exam or no medical exam, the type of whole life policy they are searching to buy.