Very simply put, Whole Life Insurance has a death portion and a life portion. The death portion will pay the face amount of the policy to the beneficiary when the insured person dies.
The life portion accumulates cash value for the insured person to use while they are still alive, if desired. They can take the cash as a loan and repay it back to their policy with interest, so that the death benefit stays intact. Or they can surrender the policy and collect the cash value at some point, at which time the death benefit ceases.
Life insurance will eventually pay out if the policy is kept up correctly and if the owner keeps the policy long enough. It is a permanent policy to cover the insured person's "whole" life. It may also pay the owner some dividends if it is a "participating" policy.
Again, this is a very simple explanation, but gives you a general idea of how Whole Life Insurance works.
.JPG){kind=avatar}
The life portion accumulates cash value for the insured person to use while they are still alive, if desired. They can take the cash as a loan and repay it back to their policy with interest, so that the death benefit stays intact. Or they can surrender the policy and collect the cash value at some point, at which time the death benefit ceases.
Life insurance will eventually pay out if the policy is kept up correctly and if the owner keeps the policy long enough. It is a permanent policy to cover the insured person's "whole" life. It may also pay the owner some dividends if it is a "participating" policy.
Again, this is a very simple explanation, but gives you a general idea of how Whole Life Insurance works.