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WHOLE LIFE INSURANCE
WHOLE LIFE INSURANCE
Whole life insurance, also known as traditional life insurance, provides permanent death benefit coverage for the life of the insured. In addition to paying a death benefit, whole life insurance also contains a savings component in which cash value may accumulate. Interest accrues at a fixed rate and on a tax-deferred basis.
Whole life insurance policies are one type of permanent life insurance. Universal life, indexed universal life, and variable universal life are others. Whole life insurance is the original life insurance policy, but whole life does not equal permanent life insurance as there are many types of permanent life.
Whole life insurance lasts for an insured's lifetime, as opposed to term life insurance, which is for a specific amount of years.
Whole life insurance is paid out to a beneficiary or beneficiaries upon the insured's death, provided the policy was in force.
Whole life insurance has a cash savings component, which the policy owner can draw or borrow from.
The cash value of a whole life policy typically earns a fixed rate of interest.
Outstanding loan principal and interest reduce death benefits.
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