Life insurance9A whole life insurance policy, unlike the term life insurance policies, covers the entire life of the policy holder till the end of his life. So there is no fixed period of time to cover your life, unlike the term life insurance policy, which protects your life for a certain point of time. The cash benefit, associated with whole life insurance policy is called death benefit. As the policy maker dies, the death benefits will be paid to the person pr persons, mentioned as his beneficiaries in his policy. Apart from guarding your life throughout your whole life, a whole life insurance policy is affordable too. As plenty of people apt for whole life insurance policy every year, the premium remains the same. This feature helps many older people to ensure their life on a fixed income as well as with a fixed premium. More over, those, who are concerned about what would happen to their families when they will die, the whole life insurance policy is best, as the policy returns a huge amount to the beneficiaries after the death of the policy owner.

There is a basic difference between whole life insurance and term life insurance. Unlike term life insurance, the whole life insurance offers cash value over time. If you cancel the policy after a certain period of time, the insurance company will then surrender the cash value to you. The cash value is scheduled to be equal to the face value when the policy holder reaches the age of 100. If the policy maker lives that long, the insurance company will be bound to pay the face value to him in a lump sum.

You can also borrow some amount of the cash value as a loan. Even though the money has to be paid back, but there is no approval process and no risk of being turned down yet. In this way, you have become your own lender. Some whole life insurance policies even pay dividends. So if you can use it to supplement your retirement income.