What Is A Whole Life Insurance Policy?

It is life insurance to protect anyone who is dependent upon you for financial support. It is also an investment opportunity with the investment usually being in bonds or stocks. The premium you pay is split between the insurance and the investment.

The policy is active unless it is canceled, the premiums are stopped or the policyholder dies. If the policy is canceled you will be paid the current cash value of the investment, in the event of death the named beneficiary will receive the policy amount. Further information can be obtained from a life insurance broker.

A percentage of the money paid into a whole life insurance policy is invested and accrues a cash value. You can borrow money against this cash value at the current loan interest rate; however the overall value of the policy may decrease. Also, it is possible that the cash value could also be used to pay off the policy.

If the cost of the insurance is less than the calculated premium then the policy could be paid dividends.

A whole life policy can be used to plan your estate. By setting up an insurance trust you could pay estate taxes from the returns of the policy.

The main purpose of whole life insurance is to give life coverage Cash value is a benefit but is not a good rate of return in comparison to other investments.

It is an idea to get a number of different quotes, perhaps from online insurance companies, to get a feel for what is available and what monthly rates are being offered.

A medical examination is normal requirement when applying for and purchasing whole life insurance. The results of a medical examination will determine how much the policy premium will be.

Policyholders are divided into two risk categories – smokers and non-smokers. The likes of heart disease, multiple sclerosis, hepatitis C, strokes, and certain types of cancers, diabetes, and rheumatoid arthritis are also used to determine which risk category to place the policyholder. The higher the risk the higher the premium may be.

Participants of high-risk activities and dangerous sports may also incur a higher premium; dependent upon what activities the insurance company deems to be risky.

Hopefully the above information will have given you more of an insight into whole life insurance. The next step is to get some quotes and it is very easy and convenient to do this online.