Whole life insurance

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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 ?
Answer: With a whole of life policy there is an obligation on you to pay the premiums for the rest of your life up to a certain age, often 85.
This is basically the same misleading argument highlighted earlier in this article to justify buying a whole of life policy.
Older people should consider a WHOLE OF LIFE policy, which pays out no matter when you die.
Other ways include setting up a whole of life policy, which is put in place once the inheritance tax has been calculated.
What a whole of life policy cannot do is accumulate capital for the person insured.
One of the further sources, however, of complaint which shows no signs of abating is the Whole of Life Policy which is sold as a savings plan.
He has taken out a whole of life policy, which is normally used to cover funeral costs.