Whole Life Insurance

Whole life insurance is considered as a type of permanent insurance. The policy will continue for whole life (until the death of the insured) or when reaching a specified period / age, and as long as the premiums are paid.

A few common types of these policies are Straight Life Policy(Ordinary Life Policy) and Limited-payment Whole Life policy. Some of the common features of this kind of insurance are listed below:

1) Whole life insurance is considered to be one of the best life insurance because it not only provides protection for whole life, and there is also a saving element which is called as “cash value”. This mean that the insured person can surrender the whole life insurance after a specified time frame (usually 3 years or more).

2) The insurance will cover the insured person for whole life. If the person dies anytime during the policy periods, the beneficiaries will get the death benefits. The insurance company will pay the beneficiaries in a lump sum amount.

3) To prevent the lapses of the policy, the premiums must be paid on time. You are usually given a grace period of 30 days from the last premium’s due date. If you are unable to pay the whole life insurance rates after the grace periods, you can also request to activate the non-forfeiture option by converting to a reduced paid-up policy. However, this option can only be activated when the insurance has acquired some cash value (usually within 3 years or more). Nevertheless, this is one of the good ways to keep the insurance in-force.

4) You are also allowed to borrow loan from your policy once it has acquired some cash value. Even so, do take note that there will be interest charged on the loan amount.

5) In comparison to a term life insurance, the premium of the whole life insurance is higher. This is because the coverage of the insurance is longer and there is some type of savings element.

6) You are usually allowed to attach additional supplement riders to the whole life insurance. In fact, a Total and Permanent Disability (TPD) benefit is usually attached to the basic policy. The TPD benefit is usually not paid in lump sum amounts but in partial payments like 1st year – 10%, 2nd year -20%, 3rd year -30%, 4th year – 40%.