Alabama Whole Life Insurance

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Reader’s Question:

I recently moved to Alabama and a local life insurance company agent who happens to be my neighbor is offering me a whole life insurance. She says that I should get a participating policy. What does that mean?

Mary

Huntsville, AL

Thank you for asking Mary

Whole life insurance policies generally offer “permanent protection” with a cash value account that grows over time. It provides a level death benefit and level premiums throughout your life and for as long as you continuously pay premiums. Who owns the cash value? The insurance owns it but will make it available to you in the form of low interest loan.

Whole life can be issued in two ways: as participating or nonparticipating. Participating whole life policies typically cost more by design and contain the intention of returning some part of the premium to the policyholder each year in what’s called a dividend. Nonparticipating whole life insurance has no dividend or return of premium features, but generally cost less from the start.

For more accurate policy issues, feel free to contact your neighbor in Alabama. She might be able to give you more detailed information as to policies available for you.