Best Life Insurance Companies That Offer Non-Direct Participation Whole Life Policies (2022)

There are many life insurance companies that offer non-direct participation whole life policies across the country. If you're worried about loans affecting your dividends, you can quickly get quotes for $4,000 a year. If you have any concerns, make sure to speak with an insurance agent before enrolling in the policy.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Dec 17, 2021

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Overview

  • Non-direct recognition won’t affect your dividends
  • Make sure you research the mutual company before you enroll
  • Direct-recognition may give you higher or lower dividends based on your cash value loans

You may be a little confused when trying to find life insurance companies that offer non-direct participation whole life policies. However, finding a good life insurance policy that rewards dividends without considering your loans may be just what you need.

Are you looking for rates for life insurance companies that offer non-direct participation whole-life policies? Enter your ZIP code into our free quote tool to see what you could pay today.

What companies offer non-direct participation whole life insurance?

Suppose you’re carefully planning how you want to receive your annual dividends as well as the potential for loaning against the policy. In that case, you’re likely interested in finding life insurance companies that offer non-direct participation whole life policies.

Some of the most popular life insurance companies that offer non-direct participation include:

  • Ohio National
  • New York Life
  • MassMutual
  • MetLife
  • Lafayette Life
  • Foresters

With these mutual insurers, your dividends will be affected by how much cash value you have accumulated. It may also affect you whether or not you have taken a loan out against that value.

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What are non-direct recognition and direct recognition in life insurance?

These variations in whole life insurance are lesser known because it only applies to mutual insurance companies that pay out annual dividends. Depending on which type of whole life insurer you’re with, you may see your dividends go up or down or stay universal throughout your policy.

Based on yearly performance, a mutual insurance company decides whether or not it would like to pay out dividends to its policyholders. Those with whole life insurance policies will either be subject to direct or non-direct recognition with the dividends.

With non-direct whole life insurance:

  • Your dividends will remain the same
  • You can borrow against the cash value in your policy

Non-direct is the traditional form of mutual whole life insurance and doesn’t consider when you receive your dividends. Instead, you can borrow against the cash value, and you’ll receive the ordinary dividends that everyone else in your non-direct category has.

With a direct-recognition whole life insurance policy, you can expect:

  • Still able to borrow against the cash value
  • These loans will affect your annual dividends
  • Your insurer can raise or lower your dividends based on your loans

A direct-recognition policy might be worth it if you know you’ll have no financial issues with the policy. If you’ve put more into the policy than you’ve loaned against, it will make sure the insurer would hold a far more positive outlook regarding your dividends.

This isn’t such an easy comparison, either, as each insurer will decide how it wants to set up its dividend programs. If you have any concerns, make sure you bring them up with an insurance agent before enrolling in the policy.

What is cash value on a whole life policy?

Some insurers will take a portion of those premiums and place them into a savings account when you pay into a whole life insurance policy, known as cash value. This accrues over time and may even have a small investment percentage to it. 

With enough cash value, you can loan against the amount you’ve already paid into the account. This can help with any major expenses or anything else you may need. You should make sure you have the means to pay it back, though, or you could risk losing your policy.

How can cash value help you while alive?

Nothing would be scarier than getting to old age and realizing that you suddenly don’t have enough money to keep living the retirement you want. But, at this moment, taking out a loan against your cash value life insurance policy that you can pay over time can help you significantly.

Some insurers may even raise your dividends depending on their recognition status and how healthy your financial relationship has been.

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What is whole life insurance?

What is whole life insurance? Like it sounds, whole life insurance will last for your entire life and will provide a death benefit to your loved ones no matter when you die. As previously mentioned, some whole life insurance policies also accrue a portion of your premiums into a savings account.

According to the Insurance Information Institute, whole life insurance is one of the principal terms of life insurance. CNN reports that whole life insurance can cost you upwards of $3,000 per year.

What is the difference between a mutual and stock insurance company?

Life insurance companies need the funds to pay out on a policy when they get started. This can come from a couple of places on the stock market or through the policyholders themselves.

The difference between a stock and mutual insurance company are:

  • Stock – Owned by stockholders on the public market, not necessarily clients of the insurer
  • Mutual – Mutual insurance is named so because it benefits the insurer and the policyholders who own a share in the company.

Each insurance company can pay out dividends, but only mutual insurance will pay out to its policyholders. Insurers on the stock market will pay out dividends to their stockholders.

Because mutual insurance companies pay dividends to each policyholder, these payments are usually significantly less than what a stockholder might receive.

You can check an insurer’s whole life dividend history with a quick Google search, which will help you narrow down your options. Some might also offer an entire whole life insurance dividend calculator to help you understand the potential payout you could receive.

How can I make sure I get dividends from a mutual insurer?

Dividends are paid out based on the success that an insurer sees each year financially. The payouts aren’t guaranteed by any means and can change in value each year.

However, because dividends come from the success an insurer sees, you could help ensure you get one each year by:

  • Paying your bills on time
  • Encouraging friends and family to enroll
  • Leave positive reviews of the insurer

Anything that causes more people to sign up and bolster the insurers’ finances will help ensure that you get an annual dividend. Some insurance companies also base their dividends on local markets, so getting more local engagement may help significantly.

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Non-Direct Whole Life Insurance: The Bottom Line

When you look for whole life insurance quotes online, it may be worth researching whether or not your insurance company takes part in direct or non-direct recognition. Ensuring you have a whole life policy that will meet your needs later in your life will be monumentally helpful.

Are you looking for quotes for life insurance companies that offer non-direct participation whole-life policies? Enter your ZIP code into our free quote tool to see what you could pay.

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Enter your ZIP code below to compare cheap insurance rates.

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