One of the most basic types of life insurance is a whole life policy. This is named whole life because the premium does not go up for the life of the policy. These policies can be issued to anyone from 2 weeks of age to age 85. The price of these policies vary from the least expensive at 2 weeks of age to the most expensive at age 85. Parents or Grandparents can plan for their children's future by setting up these policies. Then they can pass the policies on when the children become old enough to take care of the cost themselves. Keep in mind that after each birthday, purchasing a new policy will increase in price; making it essential to plan in advance for final expense coverage.
Example 1: A $25,000 Whole Life policy for a 2 week old female currently runs $10.02 a month. This same female, non smoker, at age 85 will run $334.95 a month. That is if they even qualify for a policy due to health conditions.
Do the math: $10.02 a month equals $120.24 a year. A $25,000 policy divided by $120.24 yearly premium equals 207.917 years before the death benefit is exceeded by the premium paid.
Do the math: $334.95 a month equals $4019.40 a year in premiums. This will make the policy go upside down after just 6.219 years. Granted if the insured dies within this time frame it is a great protection for the family. If they are able to get an immediate policy and not a graded policy due to health concerns. (Graded means that the policy will only return premiums paid to the beneficiary. Many insurance companies will pay an additional 10% of the premiums paid in the first 2 years. Other companies will pay 25% of the face value in year 1, 50% in year 2, 75% in year 3, 100% of face value is paid after year 3 and later).
These prices have been obtained from 1 insurance company as an example. All insurance companies vary in cost and coverage.
Contact us for your free analysis of whole life policies and if this type of protection is right for you.