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Definition of Whole Life Insurance Policy

Whole Life Insurance is a Life Insurance policy that remains in force for the insured's whole life and requires premiums to be paid every year into the policy. Death benefit and premium in most cases will remain the same. There is a return on a portion of the premiums that the insurance company invests that is called cash value. It may be guaranteed and non-guaranteed.

There are different types of Whole Life Insurance policies. Among them are non-participating, participating, level premium, limited payment, single premium, and indeterminate premium Whole Life Insurance types.

A non-participating whole life policy has a level premium and face amount during your entire life.

In a participating policy the insurance company shares the excess profits with the policyholder.

Within these types of policies there are a number of whole life plans that are available for you to choose. Indeterminate premium is similar to non-participating but here the premium may vary from year to year. Single-premium is for someone who has a large sum of money and would like to purchase a policy up front.

Mind that Whole Life Insurance typically requires that the owner pay premiums for the life of the policy. However, some policies may be paid up in several years or with a single large premium.