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Whole Life Insurance

Main Features

  • Whole life insurance protects the insured person for an entire lifetime regardless of age, provided the policy is kept up (i.e., the premiums are paid).
  • Generally speaking, the most common type of whole life insurance has fixed premiums (i.e., premiums that remain the same for the life of the policy). It also usually features a surrender value – a cash value paid out to the insured person if the policy is voluntarily terminated.
  • Other types of whole life insurance have premiums that vary at certain dates over the life of the policy.
  • Whole life insurance sometimes comes with a pre-payment option which provides an advanced sum payment to the insured person to pay expenses related to a terminal illness.
  • Whole insurance can also include a paid-up insurance option, which allows the insured person to stop making premium payments, but remain insured at an adjusted level of coverage.
  • A number of add-on coverage options can be added to a whole insurance policy:
    • Disability insurance
    • Accidental death or dismemberment coverage
    • Accidental fracture coverage
    • Coverage for the insured person’s spouse or children
    • Guaranteed insurability
    • A premium waiver in the event of disability
  • Whole life insurance is sold alone or in combination with other life and health insurance products.

Major Advantages

  • Whole life insurance meets long term needs. It is generally more expensive than term life insurance, but offers more advantages as well as lifetime coverage regardless of the age of the insured person at the time of death.
  • Most whole life policies have fixed premiums, making it easier to plan your personal or family budget.
  • The surrender value of whole life insurance can be used to obtain a cash advance or can be cashed in by surrendering the policy.
  • Benefits paid out upon death are nontaxable.

Warning: The above text is of a general nature and is intended for explanatory purposes only. Each of the products described above has its own specific features. Moreover, only the product contracts contain the complete terms and conditions as well as restrictions and exclusions to which they are subject.