With Participating Whole Life the client pays a fixed premium, and there are guaranteed cash values and death benefits. The guaranteed cash value is printed in the contract and is not affected by insurance company rates of return. These guaranteed cash values are based on cash values compounding at low interest rates (like the minimum interest rates in a universal life policy). For a policy to provide interest above the guaranteed amount, excess interest is credited in the form of a dividend. Dividends can reduce future premiums, accumulate at interest, buy additional insurance, etc. For a more thorough discussion of dividend options proceed to our definitions section. Because it can be difficult to determine crediting rates and expense loads in whole life products, consumers often have a difficult time monitoring this type of program.

The consumer should be careful when buying cash value life insurance. Our consultants believe there are many very good policies on the market, and that there are some that are not very good. Unfortunately, most customers, and many insurance agents, do not know how to compare these products. If you are willing to consider more advanced material, we will show you how to compare cash value life insurance policies.

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