What Is Whole Life Insurance
Permanent life insurance covers the entire life of the insured person. Whole life insurance, or whole of life assurance sometimes called "straight life" or "ordinary life," is a life insurance policy which is guaranteed to remain in force for the insured's entire lifetime, provided required premiums are paid, or to the maturity date.
types Of Whole Life Insurance
Different types of permanent life insurance include whole life,
universal life, and variable life. As long as you pay your premiums,
your beneficiaries will receive the death benefit when you die.
This type of insurance also combines death benefits with the
opportunity to build savings tax-deferred.
Part of your premium
payments are invested by the insurance company on your behalf. This
builds up a cash value, which you can use in several different ways.
You can take out a loan against the cash value of your policy, use the
cash as extra retirement income, or subsidize expenses like college
You may also be able to cancel, or surrender, the policy and
receive the cash value as a lump sum.
With all permanent life
insurance policies, the cash value is different from the policy's face
Cash value is the amount available if you surrender a policy,
while face amount is the money paid by the insurance company at
Premiums for permanent life insurance are generally higher than term
life insurance because of the cash value. However, the younger you
are when you buy the policy, the lower your premiums will be.