Frequently Asked Questions
What is a Mutual Insurance Company?
A mutual insurance company is an insurance company that offers a guaranteed interest rate to the clients. All policyholders in a mutual insurance company are part owners and are also awarded dividends.
What are Dividends?
A mutual life insurance company awards dividends based on interest earnings, claims experience, and operating expenses. Once the three factors are evaluated a dividend is awarded which grows the cash value of the policy.
What is Cash Value Insurance?
A standard whole life insurance policy comes with two parts, a premium payment, and a death benefit. Whole life policies have “riders” which allow the policy to adjust or are add-ons. Riders allow the policy to function in different ways. When a policy adds the Paid-Up Additions rider it will allow a large portion of the premium payment to grow significant cash value that has a guaranteed interest rate and can receive dividends.
What are Riders?
Insurance riders are elective/add-on provisions that change the coverage of the policy. It gives the policy the ability to have more options for the client. A client can choose the add a rider that allows them to access the death benefit in the event of a terminal illness. A client can choose to add a rider that allows the insurance company to pay the monthly premium in the event the client becomes disabled. The most common rider for our company to add on is the paid-up addition riders.
What are Paid up Additions?
This rider allows the client to increase their cash value, potential dividends, and death benefit. This is done by allowing the client to pay extra premiums to purchase “additional” whole life insurance. For instance if a clients monthly premium is $200, approximately 65-75% of the premium payment would go to paid up additions.
What is the guaranteed interest rate?
3%