Is Old Whole Life Insurance Better than New Whole Life Insurance?

There’s no secret that continuously low interest rates cause a struggle for life insurers and this can have a negative impact on insurance products that accumulate cash value.  However, lower market interest rates negatively impact all financial tools that use fixed interest rates as a savings mechanism–think certificates of deposit, bonds, and money market accounts.  …

Keep Reading

Evaluating Whole Life Insurance Policies

Why you are Evaluating your Whole Life Insurance Policy all Wrong

When purchasing whole life insurance, the buyer makes a long-term commitment to a strategy and–to a slightly lesser degree–an insurance company.  This notion appears very simple on its face.  It makes sense and we can follow the logic pretty easily, or at least assume we can. But a lot of people struggle with the inter-temporal …

Keep Reading

Historical Whole Life Comparison

Old Whole Life Page 1

Over the course of the past several weeks, we looked at real whole life policies and evaluated their real policy performance.  We specifically looked at cash value accumulation comparing original projections of non-guaranteed values to the actual performance of the policies.  Every policy spans a timeline of around 10 years.  we used internal rate of …

Keep Reading

What is a Life Insurance Dividend?

What is a Life Insurance Dividend?

A life insurance dividend is a non-guaranteed payment from the insurance company to the policy owner representing profits the company earned during the policy year.  Insurance companies often view dividends as a sharing of the surplus created by their insurance activities among policyholders whose insurance contracts generate profits beyond the insurer’s expectations. A dividend also …

Keep Reading

Cash Value Life Insurance, What You Need To Know

Is Cash Value Life Insurance Right For You?

Cash value life insurance, also known as universal life or whole life insurance, is a form of life insurance that builds cash value. You can use this cash value for a number of different options including pay premiums due, withdraw a portion of the cash to use as retirement income, or surrender the entire policy …

Keep Reading

How are Whole Life Insurance Dividends Calculated?

How are Whole Life Insurance Dividends Calculated?

Reversing the process for calculating the payable dividend on a whole life insurance policy is nearly impossible given the proprietary nature of life insurers.  This said we can use several pieces of information to at least create an approximation on the correctness of the dividend earned on a whole life policy in any given policy …

Keep Reading

Can I Borrow Against my Life Insurance?

Can I Borrow Against my Life Insurance?

If you are looking to borrow against your life insurance you have to ensure that you have the correct type of policy and that your policy has cash surrender value.  Once you determine that you have a type of life insurance that permits borrowing and that you have cash value against which you can borrow, …

Keep Reading