Whole life insurance

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Related to Whole Life Policies: Term life insurance, Cheap Life Insurance

Whole life insurance

A contract with both insurance and investment components: (1) It pays off a stated amount upon the death of the insured, and (2) it accumulates a cash value that the policyholder can redeem or borrow against.

Whole Life Insurance

A life insurance policy with no expiration date. That is, a whole life insurance policy provides coverage for the entire life of the policyholder (provided he/she continues to make premium payments). When the policyholder dies, regardless of when that is, his/her beneficiaries receive the death benefit. Whole life insurance 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.

whole life insurance

Whole life insurance.

A whole life insurance policy is a type of permanent insurance that provides a guaranteed death benefit and has fixed premiums.

This traditional life insurance is sometimes also known as straight life insurance or cash value insurance.

With a whole life policy, a portion of your premium pays for the insurance and the rest accumulates tax deferred in a cash value account. You may be able to borrow against the cash value, but any amount that you haven't repaid when you die reduces the death benefit.

If you end the policy, you get the cash surrender value back, which is the cash value minus fees and expenses. However, ending the policy means you no longer have life insurance and no death benefit will be paid at your death.

References in periodicals archive ?
Many whole life policies have been purchased with the expectation that policy dividends (current and accumulated) would one day pay premiums.
To address this question, our study employs two pricing-related variables: one for pricing (per-unit premium revenues) directly; and the other, a compositional variable to reflect the mix between term and whole life policies.
Some AL policies, similar to many ordinary whole life policies, use what is called the "direct recognition" method to determine how favorable investment, mortality, and expense experience is allocated to dividends on policies with policy loans.
Although the premium on whole life policies is usually payable as a level amount for the lifetime of the insured, it can be based on a shorter premium-paying period such as 10 years, 20 years, or to some specified age such as 65.
Because the carrier must guarantee the rate of return on the policy, it must set a low rate (and whole life policies do just that: The guaranteed rate is usually from 4 percent to 5 percent).
This article demonstrates that rational, well-informed consumers will choose to hold both term and whole life policies.
Expected product offerings will include Simplified Issue Term and Whole Life Policies, Single Premium Deferred and Immediate Fixed Annuities.
Consequently, policyowners bear more risk of adverse trends in mortality or expenses than if they owned traditional whole life policies.
For that, there are certain whole life policies with LTC riders that could be used, and to great effect.
Whole life policies have a living benefit and a tax-sheltered cash account that builds up inside.
The deep recession of 2008-09, which significantly hurt sales of both variable life and universal life products, also has wrought a positive change in the life insurance industry: People have rediscovered the value of whole life policies.
They like the fact that when they purchase whole life policies, premiums, face amount and cash value are guaranteed.