What are the characteristics of whole ? First, you need to understand what whole is. This type of insurance provides coverage for the named individual from the time someone opens the policy until the insured person's death. The premiums paid on the policy help to build the policy's value. Some policies have a maturity date when the policy can pay out if the insured person has not passed away at that time. The date is often the 100th birthday of the insured person. The premium stays the same through the life of the policy until redemption.
One characteristic of this kind of is its cash value. Part of each premium goes towards building the cash value of the policy. The policy pays upon the death or 100th birthday of the insured party at that value. Most whole policies offer the option to take out loans against that cash value. This is a great feature for those who hit financial straits and need a bit of help. You can repay the loans at a fair interest rate. That will restore the cash value of the policy. However, if the loan remains unpaid, the amount of the loan plus interest will come out of the payoff amount when the insured party dies. Whatever is leftover will then go to the policy beneficiaries.
Another characteristic is the steady promotions. With term life, you can also get steady premiums for the length of the term. However, if you want to renew the policy after the term expires, the insurance company will likely raise the premium levels significantly. With whole life, the premiums remain the same from the time you take out the policy until the death of the insured person. The figure may seem large at first, but over the years, the premium will become extremely affordable as the price of other things continues to increase.
Another of the significant characteristics of whole is the tax benefits it provides to the insured and the beneficiaries. The insured person pays no taxes on the accumulating cash value of the insurance policy. Once the insured person dies, their beneficiary can receive the insurance policy proceeds without incurring income taxes in most circumstances. Whole life policies make up the majority of insurance policies sold in the United States. They offer protection for the named insured's loved ones in case the individual passes at any age.