What Is Whole Life Insurance?

Definition Of Whole Life

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What is whole life insurance? With the recent chatter brought about by the recession interest in whole life insurance. Whole life insurance is a contract between an individual and a life insurance company stating that if the individual dies the company will pay a specific sum to specified beneficiary. The responsibility of the individual is to pay the premiums as per the contract. The individual can keep the policy for the rest of his or her life. Some companies use age 100 as their standard. This policy can never be taken away from you. What is whole life insurance?

Cash Or Loan Values

Whole life insurance have cash values which are payable to the owner of the policy upon surrender of the policy any time in the future. Term policies have no cash values. These cash values are lower than the premiums paid initially but in the long run can amount to a considerable sum. If the policy owner should find himself or herself in need of quick cash about 80% of this money can be obtained in the form of a loan from the life insurance company.

Policy Dividends

If your policy is a participating policy dividends will accrue and this money is also available to the owner of the policy if the company performs well enough to declare a dividend. This cash, incidentally, may be added to your cash value upon surrender or upon your request for a loan. There are several dividend options available.

What is a whole life insurance policy? Whole life is the most comprehensive of life insurance policies. It does everything a life insurance policy can do.