What is Whole Life Insurance?
Whole life insurance is a form of life insurance which in return for a fixed annual premium provides insurance cover spanning the entire life of the insured person, and builds up a cash surrender value.
The premium on a whole life insurance is divided into two parts, insurance cover and investment. The payment for insurance cover, ensures that a fixed amount is paid out to the beneficiaries in the event of the death of the insured. The payment for investment provides a cash value (surrender value) which the policyholder can withdraw or borrow against.
Whole life insurance prices are more expensive than term life insurance cover as the insurer knows that eventually the death benefit will be payable, whereas term cover usually runs for a period of 10 or 20 years.
For further information see the Wikipedia whole life insurance definition.
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