Variable Life Insurance, protective life insurance or mutual life insurance: which one is right for you?
When it comes to selecting a life insurance policy, one quickly learns that one size does not fit all.
Essentially, there are three basic types of life insurance policies: variable life insurance, protective life insurance and mutual life insurance.
Variable life insurance combines the assured financial advantages of whole life insurance with the benefits of an investment fund such as a money market, bond, equity fund or a combination these investment vehicles. Unlike a protective life insurance policy, variable life insurance functions as both a death benefit policy and as an investment strategy. It is called a variable life insurance policy because it maintains a monetary value that can be cashed in and offers a death benefit as well.Variable life insurance policies are structured in a variety of ways depending the purpose and financial objectives one has chosen to achieve. Other types of variable life insurance include variable universal life insurance. Contact your insurance agent to learn more about variable life insurance policies.
Protective life insurance is designed to provide a financial cushion to the protective life insurance beneficiaries when the policyholder is no longer able to provide.
Protective Life insurance provides a death settlement upon the end of the policyholder’s life. Protective life insurance offers a number of types of policies that are structured to meet the policyholder’s lifestyle and income. Affordability is a primary consideration of the protective life insurance policyholder’s
choice of life insurance options. Protective life insurance policies include term life, whole life and return of premium
insurance.
Mutual Life Insurance describes an insurance organization that is owned in its entirety by the mutual life insurance
policyholders. Rather than investing directly into a mutual life insurance company, the mutual life insurance cash flow is derived from mutual life insurance policyholders and paid out in the form of mutual life insurance policy benefits.
Effectively, each mutual life insurance policyholder “owns” a piece of the mutual life insurance company.
The first mutual life insurance company was founded by Benjamin Franklyn 259 years ago in Philadelphia. Since then, mutual life insurance companies have proliferated as the concept of shared, or mutual, ownership has proven effective in maintaining lower premiums than their commercial counterparts. Mutual life insurance companies function by reducing risk through the maintaining of mutual “pools” that are used to pay mutual life insurance benefits.