Whole Life Insurance

Whole Life Insurance

Whole life insurance is a permanent life insurance policy which provides coverage for an individual’s whole life. A savings component, called cash value or loan value, builds over time and can be used for wealth accumulation.

With whole life insurance policies, regular premiums pay both insurance costs and cause equity to accrue in a savings account. The policy stays in force for the lifetime of the insured, unless the policy is canceled or lapses. The policyholder usually pays a level premium for his/her whole life, which does not rise as the insured ages. The earnings on the cash value in the policy accumulate tax-deferred and can be borrowed against in the form of a policy loan. The death benefit is reduced by the amount of the loan, plus interest, if the loan is not repaid. Whole life is the most basic form of cash value life insurance.

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