A combination life insurance policy, sometimes called
a blended whole life policy, combines whole life and term insurance.
A typical combination policy might start out at 60% whole life and
40% term. Dividends the policy pays are automatically used to buy
additional whole life coverage, which gradually replaces the term
insurance. You pay lower premiums than for regular whole life
coverage, but you earn lower cash values in the earlier years of the
policy. After several years have passed, the growing portion of the
combination policy that provides whole life coverage will have
completely replaced the term insurance. Combination policies often
appeal to people who want life insurance for their old age, but also
want to keep their premiums fixed -- and unusually low -- while
they're still young.
