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| Short tips of the day about Life insurance:
What are vanishing premiums? The type of policy that was commonly utilized was not a Universal Life policy, but actually a Traditional Whole Life policy. These insurance policies paid dividends whereas Universal Life policies only have an interest bearing account. The dividends were essentially used to pay the future premiums if and only if they were large enough to cover the required cost of the insurance. Because the dividend scale is not guaranteed, there was no way to guaranty that the premiums would "vanish". These whole life policies are still very popular, and the ability for the dividends to be used to pay for future premium is still available as long as the policy is provided by a mutual company that pays dividends and the policy is �participating�. |
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