Is there a good reason why the whole life insurance premium is higher than that of term life insurance? Let us examine how life insurance premiums are constructed and see if the higher cost is justified.

There are three things which determine what a should be, your age, your health and your occupation. As you get older your health is likely to deteriorate thus a higher cost for your If you engage in a hazardous occupation you may pay more because of your occupation.

You can therefore conclude that the longer your is planned to last the more you will pay. You pay less for a level policy than you would for a level policy. You would pay more for a level Whole life lasts for the rest of your life or up until age 100, whichever comes sooner. That is why whole life costs more. Look at it this way if you were to calculate premium costs from your age, each year until age 100, you would see that as you get older the same policy costs more.

What life insurance companies do is to take an average of the cost for coverage over the years and charge a level premium per year. In other words they overcharge you in the initial years but charge too little in the latter years. The interesting thing is that the same is done with but the term policies are limited to shorter periods of time.

To compensate for the high premium whole life policies have a which really is a return of premium. They give you back some of the premium you paid if you don’t die. The also pays a if they are successful with their investments and do a good job keeping down expenses. Dividends are not guaranteed.

With some of the older and more successful companies your cash value and dividend can far exceed the premiums paid in the long run. Is the higher whole life insurance premium worth it? In some cases it is.

Don’t Pay Too Much For Your Life Insurance Policy – Get Low Cost Life Insurance Quotes From Quality Carriers. | |

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