What is Whole Life Insurance?

Having Life Insurance is something that most people take out to ensure that on their death their immediate family will not be left with expensive funeral costs or other debts that they might have.  With so many different types of Life Insurance it can sometimes be difficult to choose which one is the best. Most people take out a permanent Life Insurance which runs for the whole of the person insured's lifetime and can only be redeemed on the death of that person. A fixed premium will be paid each month and when the policy is cashed it will pay out a lump sum of money together with the bonuses that have been added over the years.  However, it is possible to take out a Whole Life Insurance, Universal Life coverage and an Endowment Life Policy where the funds for the Policy are worked out a different way.

With Whole Life Insurance a cash value is guaranteed and death benefits which are guaranteed will not reduce the cash value.  On the death of the person insured a guaranteed death benefit will be paid to the beneficiary but the cash value will remain in the policy.  The cash value can be claimed through a policy loan before the death of the insured but the death benefit will be reduced unless this cash is paid back later.  If the cash loaned is not paid back then only the death benefit remains in the policy.  With a Whole Life Insurance policy a person is insured for death benefits but a guaranteed cash value can still be left in the Life Insurance policy if this is preferred. The death benefit could also be increased by paying extra premiums or policy dividends.

Whichever Life Insurance policy is preferred is up to the individual but all Insurance companies will first need an application form filling in before they can quote you a premium.  It will depend on the age of the person to be insured, their general health, their occupation and other considerations which are all taken into account.  Someone who is young will pay a much lesser premium than someone who is middle aged as they are classed as being a bigger risk. Before signing any documentation always shop around and compare what sort of Life Insurance policies are available and would they be the right one for you. Whole Life Insurance is a way of being covered for death but at the same time being able to access some of the cash value. On the death of the person insured only the death benefits will be paid out if the cash value has already been taken.