Whole life insurance, or whole of life assurance (in
the Commonwealth of Nations), sometimes called "straight life" or
"ordinary life," is a life insurance policy which is guaranteed to
remain in force for the insured's entire lifetime, provided required premiums
are paid, or to the maturity date.
As a life
insurance policy it represents a contract between the insured and insurer that
as long as the contract terms are met, the insurer will pay the death benefit
of the policy to the policy's beneficiaries when the insured dies.
Because whole life policies are guaranteed to remain
in force as long as the required premiums are paid, the premiums are typically
much higher than those of term life insurance where the premium is fixed only
for a limited term.
Whole life premiums are fixed, based on the age of
issue, and usually do not increase with age. The insured party normally pays
premiums until death, except for limited pay policies which may be paid-up in
10 years, 20 years, or at age 65.
Whole life insurance belongs to the cash value
category of life insurance, which also includes universal life, variable life,
and endowment policies.
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