Two Types of Whole Life Insurance

Whole Life Insurance is loosely broken up into two different types.

Participating Whole Life Insurance

Participating whole life insurance is typically sold by mutual insurers.  These policies pay out dividends.  These dividends allow you to do some pretty interesting things with them such as buy more whole life insurance.   However par policies are complex and take a long time to purchase.

Non Participating Whole Life Insurance
Non Participating Whole Life Insurance is typically sold by non mutual insurers.  These policies are almost always less expensive.  But they do not pay out dividends.  Non Participating Whole Life Insurance or Non Par are best if people really want a whole life contract but want to save money.

A Better Alternative:

There are people out there that really should consider Non Participating Whole Life Insurance contracts.  Such a those that can not qualify for term products.  But for many folks a Simple and Affordable term policy is the way to go.  A long life 30 year term policy will provide you with the needed coverage that you need for three decades and the cost is so much lower.

BTITR:

The concept of Buy Term and Invest the Rest is the core strategy here that can save you big money by allowing you to save your.  Think of it this way:
If Term Policy A costs your $1000 per year and Non Par Whole Life Policy $6,000 per year, you can save $5,000 per year in the term policy.   Save that money for thirty years and voila you will have 30 years of $5,000 in savings or $150,000 before accounting for interest.

Why BTITR Can beat Non Par Policies:

The reasoning for this saving is really why term insurance is just so popular, the cost and the limited time frame for the insurance.  How many people actually do want a life insurance policy premium for their entire life?  Is it necessary?  What is not necesary are the high costs and for this reason BTITR is often the best option for consumers.