What is interest sensitive whole life insurance

Current assumption whole life insurance, which is also known as fixed premium universal life or interest-sensitive whole life, is a variation of universal life insurance. It involves fixed premiums and fixed death benefits, and, as in other universal life policies, its growth in cash value depends on market conditions.

What is interest sensitive life insurance?

Interest-sensitive life insurance is any type of life insurance that earns cash value based on a changing interest crediting rate. Some whole life policies may be interest-sensitive and all UL policies are interest-sensitive.

What is the guaranteed interest rate on whole life policy?

Guaranteed rate of return\n\n According to Consumer Reports, the average annual rate of return on a whole life policy is 1.5%. While that is low, it does beat the interest rate on many banking products, including interest-bearing savings accounts and money market accounts (MMAs).

Is universal life insurance interest sensitive?

Universal Life The universal life policy is actually more than interest sensitive as it is designed to reflect the insurer's current mortality and expense as well as interest earnings rather than historic rates.

Is there interest on whole life insurance?

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. An outstanding loan principal and interest reduce death benefits.