Whole life insurance,
Definition of Whole life insurance:
Whole life insurance provides coverage for the life of the insured. In addition to paying a death benefit, whole life insurance also contains a savings component in which cash value may accumulate. These policies are also known as “permanent” or “traditional” life insurance.
Life insurance policy that (1) normally covers an individual until his or her death, unless it lapses due to non-payment of premium or is cancelled, (2) builds up a cash value (called cash surrender value), (3) pays a fixed death benefit, and (4) where (unlike in a term life insurance) the premium amount remains constant despite the advancing age of the insured. The insured or policyholder may obtain a loan (called policy loan) against the accumulated cash value. Also called continuous premium whole life insurance, ordinary life insurance, permanent life insurance, or straight life insurance.
Life insurance that pays a benefit on the death of the insured and also accumulates a cash value.
Whole life insurance policies are one type of permanent life insurance. Universal life, indexed universal life, and variable universal life are others. Whole life insurance is the original life insurance policy, but whole life does not equal permanent life insurance.
How to use Whole life insurance in a sentence?
- The benefit of whole life insurance can be a big one to prospective employees and may help you get the most qualified candidates.
- My husband took out a Whole Life Insurance Policy in 1997 when he had a cancer scare, because he wanted to make sure we would be able to be buried and hopefully leave something for our children.
- Whole life insurance pays a death benefit, but also has a savings component in which cash can build up.
- Whole life insurance lasts for a policyholder’s lifetime, as opposed to term life insurance, which is for a specific amount of years.
- The savings component can be invested; additionally, the policyholder can access the cash while alive, by either withdrawing or borrowing against it, when needed.
- Whole life insurance is paid out to a beneficiary or beneficiaries upon the policyholder’s death, provided that the premium payments were maintained.
- My mother cashed out her whole life insurance policy prior to her death to retrieve the cash value and invest it instead.
- The percentage of expenses to premiums for whole life insurance usually varies between 10 percent to 40 percent.
Meaning of Whole life insurance & Whole life insurance Definition