What is true about whole life insurance?
Whole life insurance provides a guaranteed benefit upon the death of the insured, regardless of when they die. This offers a clear advantage over term life insurance, which only pays out if the death occurs within a specific time frame. However, whole life insurance also has significantly higher costs.
What are some of the benefits of whole life insurance policy quizlet?
It provides guaranteed death benefit protection for the insured's whole life. No matter when the insured dies, the policy pays the face amount stated in the policy. Under most whole life policies, the covered lifespan extends to age 120. It includes a guaranteed cash value that gradually builds inside the policy.
What are the 3 advantages of whole life insurance?
Whole life insurance builds cash value, provides permanent coverage, and can help build your family's wealth over the long term. These policies also offer more guarantees than other types of coverage, making them an option to consider for many people.
What is a whole life policy in insurance?
Whole life insurance is a permanent life plan that provides coverage throughout your entire life. The premiums tend to cost more than a term plan would, but getting this insurance plan may be beneficial in the long run.
What are the characteristics of whole life insurance?
how the policy's cash values are invested and grown. The most basic type of whole life insurance is called either ordinary whole life or straight whole life policy. With whole life, benefits and premiums remain level straight through the insured's whole life.
What is the cash value of whole life insurance?
With whole life insurance the cash value grows at a contractually guaranteed rate. This is necessary to support the guaranteed level death benefit and premiums. The cash value is funded by the policyowner, as part of the premium.
What happens to your whole life insurance policy when you die?
No matter when the insured dies, the policy pays the face amount stated in the policy. Under most whole life policies, the covered lifespan extends to age 120. It includes a guaranteed cash value that gradually builds inside the policy. The cash value forms part of the death benefit, but it is also accessible while the insured is alive.