Types of Whole Life Insurance Coverage
Indexed Universal Life
This is the most expensive and most flexible form of permanent life insurance. It uses the cash value of the policy as a financial tool, investing in mutual funds and other potential profitable items, such as bonds.
Whole Life
This is a typical life insurance policy. It does not expire the way a term life policy would do. Most whole life policies have an accrued cash value that can be borrowed against or even used to pay for future premiums.
Variable Life
This type of policy has a fluctuating face value based on the performance of the investment options used for the policy. The policyholder can make decisions about the investments, or borrow against the policy as with other type of whole life insurance.
Universal Life
This type of policy is known for having flexible payments options and policy variations. It is similar to a whole life policy, and the two are often confused. Universal life, like other whole life policies, has a cash value that can be borrowed against tax-free.
Variable Universal Life
This type of policy combines the advantages of a universal life policy with the investment potential of a variable life policy. Most policies include a clause that the payout value of the policy will not fall below a specific value regardless of the performance of the investments.
Final Expense Coverage
Final expense insurance is a low-cost insurance policy that is typically written with a funeral parlor or executor of estate named as the beneficiary. The payout value will never change and the premiums level and affordable.
Last Survivor
This type of policy insures two people, but only pays out when the second person dies. It is commonly used as a method to pay the estate taxes.
Single Premium Insurance
This is a whole life policy with a single lump-sum payment. It does not accrue cash value or provide the financial tools available through other types of permanent life insurance. Single premium coverage can be purchased as a term life policy as well.