Whole Life Insurance Policy

AAA

DEFINITION of 'Whole Life Insurance Policy'

A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against.

INVESTOPEDIA EXPLAINS 'Whole Life Insurance Policy'

As the most basic form of cash-value life insurance, whole life insurance is a way to accumulate wealth as regular premiums pay insurance costs and contribute to equity growth in a savings account where dividends or interest is allowed to build-up tax-deferred.

VIDEO

RELATED TERMS
  1. Accumulation Option

    A policy feature of permanent life insurance that allows policyholders ...
  2. Single-Premium Life Insurance

    An insurance plan in which a lump sum of cash is paid up front ...
  3. Equity-Indexed Universal Life Insurance

    A permanent life insurance policy that allows policyholders to ...
  4. Group Carve-Out Plan

    A type of group term life insurance designed to appeal to well-paid ...
  5. Cash Surrender Value

    The sum of money an insurance company will pay to the policyholder ...
  6. Variable Life Insurance Policy

    A form of permanent life insurance, Variable life insurance provides ...
RELATED FAQS
  1. What are some examples of when insurance bundling is a bad idea?

    Some insurance companies offer only one type of insurance, while others offer many different types. Insurance buyers often ... Read Full Answer >>
  2. What is the difference between term and universal life insurance?

    Term life insurance is the most basic of insurance policies. It is nothing more than an insurance policy that provides protection ... Read Full Answer >>
Related Articles
  1. Insurance

    Top 10 Life Insurance Myths

    The most difficult aspect of this complex product is determining how much coverage you need and why.
  2. Insurance

    Protect Your Kids And Pets With Custom Insurance

    Find out how to protect those you love the most with specialized policies.
  3. Options & Futures

    Cashing In Your Life Insurance Policy

    Tough times call for desperate measures, but is raiding your life insurance policy even worth considering?
  4. Retirement

    Variable Vs. Variable Universal Life Insurance

    Do you know why you might need one policy versus the other? Read on to find out.
  5. Home & Auto

    Taking The Surprise Out Of Long-Term Care

    Don't be caught unprepared - find out what to look for in LTC insurance policies.
  6. Insurance

    Life Insurance: Putting A Price On Peace Of Mind

    Would your death leave loved ones financially stranded? Find out how to ease your mind and keep them protected.
  7. Insurance

    What To Expect When Applying For Life Insurance

    Before jumping into a policy, check out these tips on how to score the best plan for you.
  8. Insurance

    Life Insurance: How Much Does Age Raise Your Rate?

    If you need life insurance, try to get it before your next birthday. Here's why.
  9. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  10. Insurance

    How to Use a Waiver of Subrogation

    A waiver of subrogation means that a party to a contract waives the right to allow someone (usually an insurance company) to sue the other party to the contract in case of a loss.

You May Also Like

Hot Definitions
  1. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  2. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  3. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  4. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  5. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center