Business, Legal & Accounting Glossary
Cash-value life insurance that blends security against premature death with a savings account. A life insurance policy that covers the whole of the insured’s life or lives and will pay an amount on death whenever it occurs. Whole life can either be with-profits or unit-linked and as such contains an investment element. The investment element can often be varied to take account of the level of life cover required at a particular period of time.
An insurance policy that will cover you for your whole life, no matter how long that happens to be. Because this is maximum coverage, it is also more expensive than term life insurance.
Whole life insurance, also known as ordinary, permanent, and straight life, is an insurance product that joins an investment factor with normal term insurance.
Term insurance, unlike whole life insurance, only provides a death benefit for a specific period of time. The premium payment for whole life insurance pays into two separate components. Part of the charge for whole life insurance pays for the insurance coverage. Another part pays for the investment portion of the whole life insurance policy. As a person ages, more money is allocated to the insurance coverage in a whole life insurance policy. The investment component earns interest from the company-administered investment portfolio and/or company profits. This part of whole life insurance increases in value over time. The amount of annual return is usually not based on a fixed rate for whole life insurance. Whole life insurance provides a cash or surrender value based on the value of the investment portion at any given time. This amount may be taken in cash if the whole life insurance policy is cancelled, used as collateral for a policy loan, or used to buy additional death benefit coverage. Earnings and certain withdrawals and loans from a whole life insurance policy may qualify for tax-favoured treatment.
She used the payments from her husbands whole life insurance policy to pay for the funeral expenses and the cost of moving to a smaller house.
A whole life insurance policy has a set premium amount that is paid yearly, making it easy to work into a budget.
You should try and get some whole life insurance so that the people you love most will be protected when you pass.
We had decided to suggest that the individual purchase a whole life insurance policy as he wanted to increase the amount of safety in his life.
When I was a kid, my dad bought whole life insurance for himself so that he would be able to save for retirement and my family would be covered if he died.
ordinary life insurance
vanishing premium
cash value life insurance policy
single-premium life insurance
extended term insurance
variable universal life
interest-sensitive insurance policy
Whole life insurance is a type of life insurance policy in which the premium remains constant throughout the insured’s life and the policy has a cash value. As a result, the policy includes both an insurance component and an investment component. The cash value is known as the cash surrender value, and the insured can borrow against it if necessary. When the insured person dies, the policy pays a predetermined amount.
A whole life policy’s consistent premium differs from a term life policy’s gradual increase in premium over the insured’s life. Another distinction is that a whole life policy covers you for your entire life, whereas a term life policy covers you for a set period of time and then expires. Furthermore, whole life insurance policies are significantly more expensive than term life insurance policies.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Whole Life Insurance are sourced/syndicated and enhanced from:
This glossary post was last updated: 13th April, 2022 | 0 Views.