What Are The Main Features Of Whole Life Insurance?

• Permanent Coverage.
• Level premiums.
• Pays a death benefit.
• Builds cash value (tax-deferred)
• Serves as an investment vehicle.
• Borrow against cash value.

What are 4 types of whole life policies?

• Universal. Universal life insurance often is considered the most flexible of all of the whole life varieties that are available. ...
• Current Assumption. ...
• Excess Interest. ...
• Single Premium.

Which of the following is not a feature of a whole life policy?

All of the following is NOT a characteristics of whole life insurance: The cash value in a permanent life insurance policy is not a nonforfeiture benefit. ... Cash value may be used as a policy loan, without affecting the death benefit.

What are the main features of whole life insurance quizlet?

Whole life insurance features more guarantees than any other form of permanent life insurance available today. 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.

What does a whole life insurance policy provide?

Whole 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 on a tax-advantaged basis. These policies may be known as “traditional” life insurance.

What is the disadvantage of whole life insurance?

Like all insurance products, whole life insurance has its downsides: It's expensive . Since permanent policies offer lifelong coverage, they come with a significantly higher price tag. Whole life typically costs 5 to 10 times more than term life insurance.

What are the types of whole life insurance?

Whole life or permanent insurance pays a death benefit whenever you die—even if you live to 100! There are three major types of whole life or permanent life insurance— traditional whole life, universal life, and variable universal life , and there are variations within each type.

Which whole life policy premium type is the most common?

Whole or ordinary life

This is the most common type of permanent insurance policy. It offers a death benefit along with a savings account. If you pick this type of life insurance policy, you are agreeing to pay a certain amount in premiums on a regular basis for a specific death benefit.

What's the difference between whole life and permanent life insurance?

Permanent life insurance is an umbrella term for life insurance policies that do not expire. Typically, permanent life insurance combines a death benefit with a savings portion. ... Whole life insurance offers coverage for the full lifetime of the insured , and its savings can grow at a guaranteed rate.

What is another name for interest sensitive whole life?

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 the face amount of a whole life policy paid quizlet?

The entire premium is paid in a lump sum at the time of purchase and creates immediate cash value. The face amount ( death benefit ) remains level and cash value continues to earn interest and mature at age 100. This policy has the lowest total premium outlay for the life of the policy.

What is the main difference between whole life insurance and term life insurance quizlet?

Whole life insurance is permanent insurance , as it is certain to pay the face amount either as an endowment at age 100 or upon death of the insured. In contrast, term insurance is temporary insurance, as it provides protection for only a specified term.

Is straight life a type of whole life insurance?

Straight life insurance is a type of permanent life insurance that provides a guaranteed death benefit and has fixed premiums. Also known as whole or ordinary life insurance, the policy has a term length that lasts your entire life. This is different from term life insurance which expires after a set number of years.

Can a whole life policy be paid-up?

Paid-up life insurance is an option that allows you to keep a whole life insurance policy in force without paying any premiums for a while , or permanently. ... With paid-up life insurance, the policy is kept in force by deducting the premium from your cash value account. At the same time, the death benefit also decreases.

How long does it take for whole life insurance to build cash value?

How long does it take for whole life insurance to build cash value? You should expect at least 10 years to build up enough funds to tap into whole life insurance cash value.

How many years do you pay on a whole life policy?