Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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What is indeterminate premium life insurance?

Indeterminate premium life insurance is one of several types of whole life insurance. Its distinguishing factor is that it has a provision for adjustable premiums.

When you take out indeterminate premium whole life insurance policy, the premiums are lower than for other comparable whole life policies. An amount is fixed as the maximum amount the company can charge you for premiums. As needed, the insurer makes adjustments to the premium, based on mortality, investment earnings and company expenses. Your premium may even go down, but it will never go higher than the maximum agreed upon amount.

To learn the pros and cons of indeterminate premium life insurance policies then read on. Also, be sure to enter your zip code above for free insurance quotes!

Advantages of Indeterminate Premium Life Insurance

There are many advantages to indeterminate premium life insurance. It allows you to buy more insurance than you might otherwise be able to afford right away because premiums are lower than for other types of whole life coverage. This is excellent for someone who is confident that his or her salary will increase or other payments will decrease within a year.

Even though it looks as if it would be difficult to budget with an indeterminate premium life insurance plan, it is actually quite easy. Premiums only change yearly. In addition, you know that your premium will not surpass the maximum amount agreed upon at the beginning of your policy. You also have the advantage of possibly lower premiums if your insurer finds that expenses are lower, investment earnings are better or mortality is different than anticipated.

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Alternatives to Indeterminate Premium Life Insurance

If you find that you are unsure of whether or not to take out indeterminate premium life insurance, there are a variety of other alternatives available to you in the field of whole life insurance. Each is slightly different and appeals to different people.

  • Participating whole life insurance is a form of whole life coverage that may provide you with income in the form of dividends. These are only paid during the years when insurance companies find that they have earned more than anticipated from investments, they experienced fewer deaths and/or they paid out less in expenses. When dividends are paid, policyholders can use them to help pay their premiums, increase the value of their policy, accumulate the payments or cash them out.
  • Non-participating whole life insurance coverage is whole life coverage that has a steady premium and value throughout the entire time you carry it, or for the rest of your life. Many people appreciate the fact that premiums are somewhat lower than participating whole life coverage and that they are fixed. There are no dividends from this type of policy.
  • Level premium whole life insurance is a type of plan that allows you to opt for participating or non-participating insurance and the premiums hold steady throughout your life. You will pay on this type of coverage until your death. These plans actually overcharge in the beginning and undercharge as you age. Premiums are invested and a cash value builds with this type of coverage.
  • Limited payment whole life insurance is another variation of participating or non-participating life insurance. You pay high premiums for a set number of years or until a certain age and the policy continues in effect until your death. It is advantageous for anyone who wants to retire without the stress of an annual life insurance premium in their budget.

The final type of policy is somewhat less common. It is called single premium whole life insurance and can be non-participating or participating. It is paid in full when the policy is taken out. Because of the hefty investment, such policies have cash value right away and can be used as loan value.

Buying Indeterminate Premium Life Insurance

When you have done your research and understand the different options available to you in whole life insurance, it is time to start shopping around for the best policy. There are a multitude of life insurance companies offering indeterminate premium life insurance and other types of whole life coverage. So how do you choose between them?

By using a free online quote tool, you can answer the standard life insurance questions just once and have your information submitted to multiple insurers. In no time, you will begin to receive quotes from companies which write the type of policy you are looking for in the area in which you live. You can easily compare and contrast these quotes to make sure you get the best deal possible in coverage.

Take the time to research the insurer before taking out a life insurance policy, as this is typically a long term commitment. You want to be sure that you are doing business with a financially solid company that treats its customers with care.

Get started today with the life insurance quote tool provided on this page. Enter your zip to start!