Whole Life Insurance

Whole life insurance takes into account the full term of the policy and spreads the cost of the coverage over a person’s entire life. This ensures that the life insurance policy holder will have regular and equal payments with no increases through out the term. This does mean though that the premiums paid in the early years are much higher than they would be if a term life insurance policy was taken out. The over payments though do accumulate to make the cash surrender value available in later years. If a policy holder ends their policy earlier than the term of the policy then the cash surrender fund will be available. People will also use their whole life insurance policy as collateral for taking out a loan which can either be deducted from their death benefit or paid off with interest. A type of whole life insurance is an endowment life insurance policy which runs for a set term rather than the whole life of the policy holder. At the end of the term the life insurance company will pay out the face value of the policy. The endowment life insurance is more expensive than the whole life policy due to the number of years being less.