What is an Interest-Sensitive Life Insurance?
Life insurance policies are purchased by policy owners for different sets of reasons. Some prefer to own one because of the tax deferment of insurance polices while others prefer it because of its feature of becoming a form of liquidity, in the payment of business or personal loans. Others simply wish to buy one because of their desire to have financial options for their children in the future but for those whose reason is for them to accumulate more in the future then choosing an interest-sensitive life insurance would be the perfect type of life insurance policy for them.
Interest sensitive life insurance is a fairly new type of life insurance policy which is also referred to as current assumptive life policy. It is a fixed premium type of whole life policy that offers guaranteed death benefits to policy holders even until they reach the age of 100. The cash value is comparable to the current money market rates which coincide with the bond index rates, Treasury bill rates and declarations of the Board of Directors of a company.
Feature of an interest-sensitive life policy
Interest sensitive life insurance policy offers a lifetime protection to its policy owners. It provides the same guarantee as a regular whole life policy which includes premiums that may not be increased depending on the listed agreement in the policy, death benefits and cash values. The only advantage of an interest-sensitive life insurance policy is its ability to include excess or current interests into the policy which results to an accumulation in your cash values.
Bountiful Result of Excess Interest
Excess interest crediting will provide you two results:
1. Potentially faster rate of accumulation of cash value in your policy compare to other types of policy; and
2. Potential increase in your death benefit claims.
The Best Candidate for Interest Sensitive Life Insurance Policy
Those who are in search for an additional life insurance policy are the best candidates for this particular kind of policy. This may include professionals, heads of household, seniors, singles, breadwinners and in other words anyone who has the capacity to pay the premiums of the policy.
Guaranteed Protection in Claiming the Death Benefits Claim
If you want assurance that your beneficiaries will receive their death benefits claim then interest sensitive life insurance policy is everything that you are looking or. It serves an income for your children while they grow up. It can also provide your spouse with sufficient income for his or her daily needs. It can be a source of payment for future taxes and final expenses.
Tax Deferred Feature and Its Advantage
Another major reason why most people prefer to purchase interest sensitive life insurance policy is it tax deferment characteristic. Savings from tax expenses can be used to help accumulate funds for the college education of your children, pay your home mortgage, serve as funds for future emergencies, business opportunities or investments or it can be converted into a retirement plan or lifetime income.