Whole life Insurance has level premiums and will provide protection until age 100. There are several types of whole life- Ordinary Life Insurance, Limited-Payment Life Insurance and Endowment Insurance.
Ordinary Life and Whole Life Insurance
Ordinary Life Insurance is a form of Whole Life. Lifetime protection is provided until age 100 and the premiums remain level. In the event the insured is still alive at age 100 the full face amount will be paid without death having to occur.
Limited-Payment Life Insurance- Although the premiums are level they are only paid for a certain number of years. After this payment period, the policy becomes paid up. Limited-Payment policies can be issued for ten, twenty or thirty years. A policy that is paid up at age sixty-five or seventy is still available. The premiums for a Limited-Payment policy are higher than an ordinary life insurance policy but the cash value is also higher.
Endowment Insurance – This is the third basic type of Whole Life Insurance. An endowment pays policy proceeds to the named beneficiary if the insured dies within a certain period. Should the insured survive to the end of the stated period, the policy proceeds are paid to the policy owner.