Whole Life Insurance Explained - What Is Whole Life Insurance?

If you want to buy whole life insurance, you are going to be asked by the insurance company to undergo a medical exam. The insurer needs to know whether you are suffering of any medical condition because this might affect your insurance price. There are medical conditions that might not allow you to buy whole life insurance, like AIDS, heart disease, diabetes or cancer.

Whole life insurance is a type of life insurance that is in effect for as long as you are going to live or until your 100th birthday. It is called permanent life insurance because it doesn't expire as long as you keep paying the premiums. If you get whole life insurance, you are supposed to pay premiums your entire life. There are also policies that can be paid in full when or until you reach a certain age. These are not standard policies and they also cost more than other ones.

The premium that you have to pay for whole life insurance is higher than the amount needed for the actual costs of your insurance. The excess is directed into a savings account. The point of this is to build cash value and to entitle you to use it as you please. You can lend money from the cash accumulation and as long as you put them back this won't affect the death benefit. You will also earn interest for this money.

Whole life insurance policies have lost their popularity lately. This is because term life insurance is cheaper and many people decide to go for this one and to invest the money they save on their own. If you don't know for sure which type of life insurance suits you most, discuss your situation with an insurance agent and ask some free quotes so you can make a general idea on the costs.