Whole Life Insurance
Whole life insurance is more than protection for the
family. The reason is easy to understand: it is built around the idea of cash value. Cash value is the amount
of money paid to the certificate holder if surrendered. The cash value is
always less than the death benefit. It’s a real asset with real value that
can protect you for your entire lifetime.
As cash value builds up, dividends are declared
annually. These dividends can be used in various ways:
- Paid in cash
- Put into "dividends on deposit", which earns interest
- Purchase "paid up additions", or additions to the life insurance
certificate. Which means a larger death benefit and even more growth in
the cash value.
- Applied to reduce premium
Whole life can be a standalone certificate, or it can be combined with term
insurance in
Blended Insurance.
Blended Insurance
Foresters offers a range of options to achieve the death benefit you choose.
With Foresters Advantage Series, you can select whole life insurance for the total
amount or reach the total amount with a combination of whole life plus term
insurance. As a rule, the larger the term insurance component, the lower the
premium. But also remember that term insurance is not building up cash
value. The advantage is you control how much of your premium purchases
coverage and how much increases cash value.
As the following chart shows, you can choose from a range of options that start
with Whole Life alone. In the chart example, the death benefit is $100,000
but actually the total death benefit could be larger or smaller. Foresters
whole life is eligible for declared dividends, which can either be taken in
cash or applied to reduce premium or taken in additional insurance and
increase cash values.
 |
Name |
|
Type |
|
Ratio of Whole Life
to Term |
|
Ratio of Amount |
|
|
|
Advantage |
|
Whole Life |
|
1:0 |
|
$100,000:$0 |
|
|
|
|
|
Advantage 1 |
|
Blended |
|
1:1 |
|
$50,000:$50,000 |
|
|
|
|
|
Advantage 2 |
|
Blended |
|
1:2 |
|
$33,333:$66,666 |
|
|
|
|
|
Advantage 3 |
|
Blended |
|
1:3 |
|
$25,000:$75,000 |
|
|
|
It is important to note that as dividends are paid out on
the Whole Life portion of the death benefit, they must be used to purchase more
Whole Life insurance. As the total death benefit doesn’t change, this means the
portion that is term insurance decreases with each dividend paid. The
certificate holder also adds cash value with these dividends.
With these kinds of options, it’s much easier to find an amount of insurance
that feels right to protect your family and balance that with an amount of
premium that you feel comfortable paying.
The idea is to get the insurance you need with the amount that you can afford,
all within a financial overview that is realistic.
Talk to a Foresters representative for more details.
|
for Americans
