Traditional Whole Life Policy

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Traditional Whole Life Policy

A life insurance policy with no expiration date. That is, a traditional whole life policy provides coverage for the entire life of the policyholder (provided he/she continues to make premium payments). When the policyholder dies, his/her beneficiaries receive the death benefit. Traditional whole life policies also include a cash surrender value, allowing the policyholder to recover part of the premium he/she has invested in the policy should he/she ever decide to cancel the policy.
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Consequently, policyowners bear more risk of adverse trends in mortality or expenses than if they owned traditional whole life policies.
Some IUL policies, similar to many traditional whole life policies, use what is called the direct recognition method to determine the amounts the insurer will credit to cash values subject to policy loans.
4) Universal life insurance has many unique features not found in traditional whole life policies.
has also observed a flight from universal life to traditional whole life policies.
Most plans are traditional whole life policies with guaranteed premiums and a guaranteed face amount with non-forfeiture options.
At the time of issue, the premium and death benefit levels are fixed, similar to traditional whole life policies.
Similar to many traditional whole life policies, the mortality charge is fixed and guaranteed.
Therefore, cash values build more quickly than with traditional whole life policies.
Similar to traditional whole life policies, standard universal life policies provide certain interest, mortality, and expense guarantees (although costs may in the end be more favorable, albeit on a non-guaranteed basis).
Like traditional whole life policies, universal life insurance policies guarantee a minimum interest rate (often 4%) on the cash value of the policy.
Conversion policy choices to a variety of permanent policies including traditional whole life policies that are eligible for dividends which are not guaranteed.
There is no minimum schedule of cash values as with UL or traditional whole life policies.
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