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About Whole Life Insurance

By Compuquotes Team on March 26th, 2008

Whole life insurance builds cash value, which is a sum that increases over the years and is tax deferred. If you were to cancel the policy then you would be able to receive a lump sum that is equal to the amount you had built up. If for some reason you weren't able to pay your monthly premium then you have the ability to use the cash value in your policy to pay the premium. You can even borrow against the cash value in your whole life insurance policy in the form of a loan.

Whole life insurance allows you to pay the same premium amounts over the period of the term, averaging the cost of the policy over your lifetime. Whole life insurance is also known as straight life or permanent life and is protection that can be kept for as long as you are alive.

With a whole life insurance policy the face amount is the same and will be paid if you die at any time while the policy is in effect. These policies are designed to mature when you reach the age of 100, and once you do you aren't required to pay any more premiums. The policy's cash value is the same as the face amount.

Life insurance is used as a type of level protection during income producing years. Commonly when people hit retirement they start to use their accumulated cash value to cover their retirement costs.

For example it can pay dividends, which are commonly used to buy additional amounts of insurance rather than taking the cash. This is the same as taking a few extra dollars out of your pocket and making a separate purchase. Dividends are really a successful sales tool simply because people like the idea of getting something extra back.

One of the main benefits that are included with a whole life insurance policy is that you are guaranteed a level premium payment, as well as the death benefit and the increasing cash values within the policy.

Having a whole life insurance policy will also guarantee the interest rate on any loan that you take out against the cash value of the policy in the form of collateral. The guaranteed interest rate on the policy will likely be much lower than what you can get from a bank. The one thing that is not guaranteed with this policy is a dividend.

The life insurance industry is highly competitive which makes it possible for you to get a policy with great coverage at a decent price. The best place to get several quotes in a quick and easy manner is online. Life insurance companies are making their websites as user friendly as possible so that you can get a quote in as little as five minutes.

Remember that quotes are nothing more than a guideline and the prices could change when you complete a full application. If this does happen and you aren't satisfied with your new premium then you are obligated to purchase anything.

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