Whole Life - This product is designed to provide coverage for the life of the client or an extended period of time usually 20 or more years.. Whole life provides some of the strongest guarantees of the life products.  Premium and death benefits are guaranteed to remain level for the life of the contract in most cases.  These products build up value inside the policy on a tax deferred basis.  These values can be utilized for several purposes, the most important is to provide the necessary funds to pay future mortality and expenses.  This option can be used when the policy values are sufficient, on a current assumption basis, to pay all future policy costs to maturity.  Policy values can also be accessed to provide retirement benefits, college funding and also many business uses (key person, buy/sell, split-dollar and deferred compensation).

Advantages - Policyholders can plan for an annual expense that will not fluctuate and have a guaranteed benefit amount.  Total outlay is usually less than term insurance over an extended period, and has better guarantees than universal life when the same benefits are targeted.  The cash value build up reduces the net cost of the coverage and can show positive return over the life of the contract.

Disadvantages - Premiums are higher than other types of products because the premiums are calculated on carrying the benefit to maturity base on the minimum guaranteed interest rate (usually between four and five percent) and maximum mortality rates.

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Regulatory Disclosure Information

Securities offered through Mutual Service Corporation. Mutual Service Corporation and LPL Financial are affiliated companies and are members of FINRA/SIPC. FINRA web site is www.FINRA.org.  Investment Advisory Services offered through Financial & Investment Management Advisors, Inc., an SEC Registered Investment Advisory Firm. Financial & Investment Management Advisors, Inc. is not affiliated with Mutual Service Corporation or LPL Financial.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, and Certified Financial PLANNER™, which it awards to individuals who successfully complete initial and ongoing certification requirements.

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Last modified: June 17, 2008