Options for customizing your whole life insurance policy

  • Choose how long you want to pay premiums. Some popular options include life pay, 15 year pay, or 20 year pay plan. You can even purchase with one single payment. Permanent coverage, but the premiums don’t have to be.
  • Participate with dividends, i.e. receive a payment from the life insurance company. Although dividends are not guaranteed, they are paid once a year and can be used to lower premiums, buy paid-up additions (raise the death benefit), add to the cash value, or used to purchase paid-up term insurance.
  • Riders are available for additional coverage or flexibility. Some options include: waiver of premium upon disability, term 10, 20, 25, or 30 additions, child coverage rider, accidental death, return of premium, monthly income, critical illness rider, and hospitalization and home health care rider.
  • Guarantees - the death benefit, premium schedule, and cash values are all guaranteed in a whole life insurance contract.


Twenty years ago, when they were newlyweds, Mike and Kristy purchased a $100,000 participating whole life policy from IT Insurance. They were planning to have a family and so for an extra premium they added a child insurance rider which automatically covers any newborn as soon as they reached 15 days old with $25,000 of insurance. Before the rider expires, on the child’s 21st birthday, $25,000 of coverage can be transferred to a policy in the child’s name, without evidence of insurability.

By the 20th policy year there will be substantial cash value built up if the participating dividends from IT Insurance are allowed to compound tax free within the contract. Today, Mike and Kristy are ready to build their second dream home because they chose to purchase paid-up additions with their participating dividends over the last 20 years which has increased their death benefit to $360,000 (without evidence of insurability) to help cover the new mortgage.

Quick Tip: This simple example shows how participating whole life has always been one of the cornerstones of financial planning with its flexibility to adapt to the changing life insurance requirements of policyholders; with one, level premium, permanent contract. Participating whole life policies are experiencing a resurgence of interest since the stock market crashes of first decade of the 21st century have increased the need for safe and guaranteed policy contracts.


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