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What Is No-Load Life Insurance?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 05 November 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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No-load life insurance is a form of life insurance plan that does not incur any type of ongoing fees or charges that go to fund commission payments to salespeople or agents. This means that more of the premium paid for a no-load life insurance plan that is classed as whole life coverage goes toward building cash value in the policy. While this type of plan does offer the benefit of a more manageable premium and the chance to build cash value more quickly, there are also some potential drawbacks that should be considered before opting for this approach.

One of the main advantages of no-load life insurance is the ability for individuals with lower income levels to secure and maintain a whole life insurance plan that fits into the limited household budget. From this perspective, the option makes it possible to provide for loved ones more effectively in the event the insured party should die suddenly. The peace of mind that comes from being able to grow cash value into the asset typically makes this type of whole life plan well worth considering.

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At the same time, there are a couple of factors to carefully consider before deciding to go with a no-load life insurance plan. One has to do with the level of service and support that is provided once the policy is in place. Typically, insurers that do charge agent fees and charges also provide immediate access to customer service that includes help with filing claims or getting information on the current status of the policy. When the life coverage is in the form of a no-load life insurance plan, availability to some sort of support may be limited, and could take longer to reach or receive answers to questions about the terms of the policy. This can be important, since it also means that the burden of researching options for upgrade or changes to the plan rests with the policy holder, since no agent will be proactively contacting the insured party with this type of data.

Along with weighing the pros and cons of no-load life insurance, it is also a good idea to investigate the background of each insurance provider before making a final selection. The goal is to make sure the provider is financially stable and does have a reputation for being reliable and ethical. Taking the time to look into the background of each provider offering no-load life insurance plans will minimize the potential for unanticipated problems over the life of the policy, as well as when the time comes to receive some sort of benefits from the plan.

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