Jul 19 2011

What is whole life insurance?

Category: Life Insurance

Answer:

Term LifeWhole life insurance is a type of life insurance policy that remains in effect for the policy holder’s entire life and requires monthly or yearly premiums to be paid for the duration of the policy. Unlike term life insurance, whole life insurance builds cash value, lasts as long as the individual, and has a guaranteed payout. The cash value can be borrowed against and will remain tax-deferred until it is withdrawn. Whole life insurance also provides lifelong coverage with no medical or health examinations. One downside to this type of insurance is the cost. Whole life insurance premiums are typically several times higher compared to a term policy of the same face value. This difference is due to the policy holder paying for both the investment and insurance portion of whole life coverage.


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