Define Whole Life Insurance
Learn How The Whole Life Policy Works
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People may want to know how to define whole life insurance. The reason they ask is because this policy is maligned a great deal by so called experts. What is whole life insurance all about? Is it a good policy to buy? How would one define whole life insurance? I am going to give you a brief outline of the whole life policy and you decide.
Whole life insurance provides coverage to age 100 as long as you continue paying the premiums. The monthly, quarterly, half yearly or yearly premium for this policy is much higher than you would pay for term insurance. The whole life premium never increases for as long as you own your policy. The face amount remains level throughout. This face amount may increase if you choose to use the dividends of your participating whole life policy to purchase paid up additions. Paid up additions are tiny single premium whole life policies which increase your death benefit as well as the cash surrender value of your policy.- Whole Life Cash Surrender Value
Whole life insurance have what is referred to as cash values. You can surrender your policy for its cash value at any time. Whole life policies will have cash values usually after 2 or 3 years. These cash values start out to be much less than the premium paid up to that time but over the years they can amount to a considerable sum when added to dividends. Cash values also earn a guaranteed interest rate. Whole life insurance may also earn dividends if the policy is a participating policy. Dividends are not guaranteed and they depend on the investment performance of the life insurance company as well as the company's ability to be cost effective. - Whole Life Insurance Dividends
Whole life insurance dividends can be used in many different ways. You can chose to leave them to accumulate interest. If this option is chosen and you add your dividends to the cash value of your policy this value can amount to a considerable sum over time. You can elect to use the dividend to purchase paid up additions or you can use it to reduce premiums. This would mean that you would pay less in premiums than you initially contracted for.
That basically is how one would define whole life insurance. Which should you buy? You be the judge.
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Whole Life Insurance
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Define Whole Life Insurance
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