Whole Life Insurance Defined

Explanation Of Whole Life Insurance

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Whole life insurance defined. What is whole life insurance, how can whole life insurance be of benefit to you? Most people are told by well meaning friends to buy term life insurance. As a result they never learn anything about whole life insurance.

Whole life insurance defined. What is whole life insurance, how can whole life insurance be of benefit to you? Most people are told by well meaning friends to buy term life insurance. As a result they never learn anything about whole life insurance. For those who want whole life insurance defined here goes.

The best type of whole life insurance to buy are what is referred to as combination plans. That is whole life combined with term insurance. This way you get fairly substantial coverage but you also have a cash value in case you want to stop the policy at some point. It is therefore wise to learn a little about whole life if only to see if it is something that would interest you.

Whole Life Defined

This type of policy, whole life, provides a level death benefit for the rest of your life, even if you live to age 100. This means that the death benefit never decreases. At your death, regardless of how you die, other than by suicide, the life insurance company will pay the full face amount to your loved ones. This can be paid in one lump sum or in the form of a monthly income.

• Premiums

  Whole life premiums are higher than term life premiums simply because these policies last longer than term insurance. The older one gets the more it costs to cover that person with life insurance. You can keep whole life insurance up until age 100. Whole life insurance therefore costs more than term insurance which you keep for a limited period of time.

• Cash Values

  Whole life insurance has cash values. They accumulate interest. They are a return of premium.

• Dividends

  Whole life also pays dividends, that is, if you buy a participating whole life policy. These dividends may be used to purchase paid up additions, they may be used to reduce premiums, they may be paid to you in cash each year or they may be left to accumulate interest.