THE “WHOLE LIFE” BOX WHOLE LIFE (WL) is the most “opaque” and complex life insurance product ever created. By design WL cannot be broken down into its different parts. This fact has long frustrated accountants and technical types who crave clarity, transparency and factual disclosures. The infancy of WL’s design dates back into the early 1900’s. Its design has evolved in many ways over the decades. The products sold forty and fifty years ago
Whole Life – How it Works
Whole Life
Whole life originated in centuries past as a non-profit approach designed to offer a surviving beneficiary (typically a spouse) a lump sum payment upon the death of an insured party (typically a wage earner). It evolved over long periods of time to include an endowment cash value element. Followed in subsequent decades with the further evolution of the cash value element including an ingenious approach to allocating earnings on paid premiums between a group of policy owners in the form of dividends.
Aside from an early 1980’s effort to mesh stock accounts into a WL framework by actuary Jerry Golden (on behalf of Equitable Life Assurance) , it is exclusively an interest sensitive product. For better when interest rates are high and for worse when they are low.
For an education on whole life (WL) please consult the “How it Works” series of write ups on this product type. Today finds WL products to be under extreme economic and regulatory induced stress. The overwhelming majority of “in force” WL policies are at extreme risk of lapse.
Anyone who owns, or is considering purchasing, a WL product should educate themselves on the design realities of WL and how they interplay with current economic and regulatory factors. It is now, and has been for some time, a “buyer beware” product.
It is equally important to note this is not the result of ill intent as much as it is the consequence of its design. Economic and regulatory realities no longer favor the products ability to deliver meaningful cash value accumulations. It’s no ones fault. It’s just the way it is.
Because WL is widely owned by a great many older American’s a considerable number of write-ups appear on this site attempting to educate current owners and potential new buyers about how WL works. Or, better said, how it no longer works. I’d urge anyone in either category to take the time to educate themselves by reading these extensive and detailed write-ups.
“HOW IT WORKS”: #2) WHOLE LIFE: POLICY DESIGN BASICS
Whole Life (WL) is the most complex product ever developed by the life insurance industry. Complex in the sense it cannot be broken down into its parts. It is a bundled product. Anyone who intends to read this write should first read the “How it Works – Whole Life Box” write up. It provides a design framework that sets the stage for a more detailed discussion of WL’s various moving parts. INTRODUCTORY COMMENTS The WL
“HOW IT WORKS”: #3) WHOLE LIFE: DIVIDENDS
Whole Life (WL) is the most complex product ever developed by the life insurance industry. Complex in the sense it cannot be broken down into its parts. It is a bundled product. Anyone who intends to read this write should first read the “How it Works – Whole Life Box” write up. It provides a design framework that sets the stage for a more detailed discussion of WL’s various moving parts. I would also suggest
HOW IT WORKS”: #4) WHOLE “LIFE: GUARANTEES
Whole Life (WL) is the most complex product ever developed by the life insurance industry. Complex in the sense it cannot be broken down into its parts. It is a bundled product. Whole Life (WL) is the most complex product ever developed by the life insurance industry. Complex in the sense it cannot be broken down into its parts. It is a bundled product. Anyone who intends to read this write should first read the
“HOW IT WORKS”: #5) WHOLE LIFE: ECONOMIC REALITIES
Whole Life (WL) is the most complex product ever developed by the life insurance industry. Complex in the sense it cannot be broken down into its parts. It is a bundled product. Anyone who intends to read this write should first read the “How it Works – Whole Life Box” write up. It provides a design framework that sets the stage for a more detailed discussion of WL’s various moving parts. I would also suggest
“HOW IT WORKS”: #6) WHOLE LIFE: REGULATORY REALITIES
Whole Life (WL) is the most complex product ever developed by the life insurance industry. Anyone who intends to read this write should first read the “How it Works – Whole Life Box” write up. It provides a design framework that sets the stage for a more detailed discussion of WL’s various moving parts. I would also suggest reading the “WL Design Basics”, WL Guarantees” “WL Dividends” and WL Surrender Charges” write up’s before reading
“HOW IT WORKS”: #7) WHOLE LIFE: SURRENDER CHARGES
Whole Life (WL) is the most complex product ever developed by the life insurance industry. Complex in the sense it cannot be broken down into its parts. It is a bundled product. Anyone who intends to read this write should first read the “How it Works – Whole Life Box” write up. It provides a design framework that sets the stage for a more detailed discussion of WL’s various moving parts. I would also suggest
“HOW IT WORKS”: #8) WHOLE LIFE: PUBLIC versus MUTUAL OWNERSHIP
Whole Life (WL) is the most complex product ever developed by the life insurance industry. Anyone who intends to read this write should first read the “How it Works – Whole Life Box” write up. It provides a design framework that sets the stage for a more detailed discussion of WL’s various moving parts. I would also suggest reading the “WL Design Basics”, WL Guarantees” “WL Dividends” and WL Surrender Charges” write up’s before reading
“HOW IT WORKS”: #9) WHOLE LIFE: PAID UP ADDITIONS AND TERM RIDERS – THEIR USE AND IMPACT ON WL VALUES
Whole Life (WL) is the most complex product ever developed by the life insurance industry. I would urge anyone who intends to read this write up to first read the “How it Works – Whole Life Box” write up first. STANDARD INTRODUCTORY COMMENTS Whole Life (WL) is the most complex product ever developed by the life insurance industry. Complex in the sense it cannot be broken down into its parts. It is a bundled product.
“HOW IT WORKS”; #10) WHOLE LIFE: CAN WHOLE LIFE BE UNDERSTOOD AND COMPARED
I would urge anyone who intends to read this write up to first read all of the rest of the Whole Life “How it Works” write-ups with the exception of the “infinite banking” write-up which pertains to a unique and ill-conceived WL sales approach. This is one of two final write-up in that series discussing obstacles pertaining to attempts to compare WL products. STANDARD INTRODUCTORY COMMENTS Whole Life (WL) is the most complex product ever
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