In contrast to the term life policy that was discussed in “Protecting Your Family: Term Life Insurance,” with it’s three basic forms, there are many different types of permanent life insurance. The oldest and most traditional form of permanent life insurance is whole life insurance. Whole life insurance features more guarantees than any other form of permanent life available today.
Whole life is distinguished by two features:
1) It provides a guaranteed death benefit protection for the insured’s whole life. No matter when the insured dies, the face amount of the policy should be paid. Under most policies the covered lifespan will extend to age 100. This means that the maximum premium payment period ends at age 100.
2) It includes a guaranteed cash value that gradually builds inside the policy. The cash value forms part of the death benefit, but it is also accessible during the clients life span. Since premiums are paid until age 100, the cash value accumulates up to that age. We say the policy endows at age 100. At this point there is no longer any pure insurance protection and the policy terminates and the cash accumulation is paid out to the policy owner.
The most basic type of whole life insurance is called continuous pay or straight life, or often simply “whole life.” With whole life, benefits and premiums remain level straight through the insured’s whole life. Death benefits will remain level, and premiums are paid until the insured dies or they reach 100. Premiums will never increase. These policies have the lowest annual premiums of all of the various types of whole life.
If you would like to learn more about whole life policies, please contact Insurance for Veterans at 803-250-3709 or by email at firstname.lastname@example.org.