The reason it is difficult to get an instant whole life insurance quote online is because it is a lot more complicated than term life insurance. With term you can just enter your date of birth (which is important because the majority of insurance companies base the rate on your nearest age within six months), how much death benefit you want, expected underwriting rate class, and the length of the term. In seconds you can have a term life insurance quote. Unfortunately with permanent life insurance such as whole life there are more inputs to generate an illustration and unless someone is trained in using the software it is extremely difficult to generate a whole life insurance quote online. The permanent life insurance cost will vary depending on how long the policy owner wants to pay into the policy. With whole life insurance you can pay up the policy at different intervals of time such as a single installment, 10 pay, 20 pay, paid up at age 65, and lifetime pay. In order to run the illustration correctly a person has to know how long they want to pay premiums into the policy. Typically the more a person pays into a policy faster will create higher cash value in the policy.
• Apply dividends to purchase paid-up additions – Additional life insurance can purchased by utilizing dividends, but the rate is based on the current age of the insured at the time the dividend is used to purchase the paid-up additions.
• Receive the dividends in cash – Once the insurance company declares the dividend for the year, on the contract anniversary date the company puts a check in the mail or electronically deposits the cash into the policy owner’s bank account.
• Use dividends to reduce premium payments – dividends can be used to reduce the annual premium payment which can make the policy more affordable over time.
• Apply dividends to buy term insurance – this can be done with some policies through the use of a separate rider which generally purchases one year term life insurance.
• Use dividends to stockpile interest- money can be taken out anytime, but the interest is taxable income in the year the dividend is credited to the policy.
Choosing one of these dividend options is required in the design of the whole life insurance quote which is another reason why it is difficult to find a website in order to generate a permanent life insurance quote online. Another reason why it is difficult to create an online quote for permanent life insurance is because of the compliance departments at the insurance companies, because they are afraid of people designing life insurance illustrations the wrong way and end up inadvertently harming themselves. This is why insurance companies require a signed illustration by the policy owner and a licensed insurance agent when purchasing a permanent life insurance policy.
Another type of permanent life insurance commonly confused with whole life insurance is universal life insurance. A universal life insurance policy can also be designed to build significant cash value to potentially supplement a person’s retirement. Unfortunately it is also difficult to generate an online universal life insurance quote because of the variables involved. There are multiple premium solves when it comes to running a universal life insurance illustration such as:
• Minimum premium – the smallest premium a policy owner can pay into the policy which is determined by the insurance company. Generally the minimum premium will only carry the policy out for twenty to thirty years and the policy owner should plan on increasing the premiums sometime in the future in order to have the death benefit coverage continue on for the desired length of time.
• $1 at Age 100 – designs the policy to have at least one dollar at age one hundred based on current interest rate assumptions. The concept is that as long as there is $1 in the policy the insurance company is obligated to pay out the death benefit to the policy owner’s designated beneficiary.
• Guideline annual / level premium – the maximum premium a policy owner can pay into the life contract for the life of the policy without causing the policy to become a Modified Endowment Contract (MEC). This can be an advantageous way to fund the permanent universal life insurance policy in order to potentially supplement a retirement income stream tax free.
• 7 Pay / Max Non-MEC – the maximum premium a policy owner can pay into the policy as soon as possible without causing the policy to become a MEC. The difference between this premium solve and guideline annual / level is that the policy owner has to stop contributing the max non-MEC premium typically after 5 years or else the policy will become a modified endowment contract and lose its privileged taxation status. This premium solve is the fastest way a policy owner can contribute the maximum cash into the policy as quickly as possible.
Choosing the correct premium solve is extremely important in order to accomplish the policy owner’s desire for their life insurance policy. This is another reason why it is difficult to generate an instant permanent life insurance quote online. If you are looking for information about permanent life insurance and would like to speak with a licensed agent, please email or call our office and a permanent life insurance specialist will design an illustration to meet your needs.