an advantage of par whole life -- Insurance Forum

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Date Posted: Mon, August 05 2002, 9:27:32
Author: Rich Franzen
Subject: an advantage of par whole life

In updating The Visible Policy to use a better mathematical model, I discovered something I didn't know before. It seems that by slightly overfunding a participating whole life policy, it is relatively inexpensive to have the death benefit keep up with the effects of inflation.

For a thorough explanation and chart, see Dead Man's Wave. I have been paying 1/3 extra than the required premium payment, using it to purchase OPP (Option to Purchase Paid-up insurance). If I keep this up for 14 years, premium and OPP payments could stop (presuming dividend scale stays what it is now). Yet the Death Benefit handles the negative effects of inflation very well. Is this a commonly known effect, or have I made a mistake in my spreadsheet model?

-- Rich
--- http://rocq.home.att.net

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Replies:

Re: an advantage of par whole life -- Brent D. Gardner, ChFC, Mon, August 05 2002, 17:08:01
- Re: an advantage of par whole life -- Rich Franzen, Tue, August 06 2002, 5:14:43
  - Re: an advantage of par whole life -- Brent D. Gardner, ChFC, Tue, August 06 2002, 14:27:52
    - Re: an advantage of par whole life -- Rich Franzen, Tue, August 06 2002, 19:09:16
      - Re: an advantage of par whole life -- Brent D. Gardner, ChFC, Wed, August 07 2002, 0:21:43