Permanent Insurance: Non-investment vs. Investment

Non-investment vs. Investment is a way of categorizing permanent insurance policies so you understand what you are buying. 

In layman’s terms, insurance that offers investment options or has investments embedded into the plan versus straight, simple insurance coverage.

  1. Non-Investment Grade

As the name suggests, this is permanent insurance where the focus of the coverage is strictly the insurance.

  1. Term-100 – straight insurance, no cash value account
  2. Non-Participating Whole-Life (WL) – straight insurance, but a guaranteed cash value account that grows over time (in case you want to cancel the policy in later years)

2. Investment Grade

With these types of policies, insurance is the foundation (as it always is), however, there are investment options that exist that help to grow the value of the policy

  1. Universal Life (UL) – Flexible permanent insurance. Pay the minimum-funding amount to keep coverage inforce. Decide if you want to deposit more $$ into the policy which would grow tax-free (various investment options available).
  2. Participating Whole-Life (PAR WL) – Set premium for life, however, the premium covers the insurance portion along with being invested into that insurance company’s participating dividend fund. Dividends earned can be used in various ways to assist the policy (for example, adding more coverage).

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