Participating Whole Life

In-Depth Description - Participating Whole Life

Whole life insurance provides death protection for the whole of life. Typically the policyowner would pay the same premium for as long as the insured should live. Premiums can be several times higher than premiums you would pay initially for the same amount of term insurance, but they are smaller than the premiums you would eventually pay if you were to keep renewing the term insurance policy until the insured's later years.

Although you pay a higher premium initially for whole life than for term insurance, whole life policies develop cash values which may be available to the policyowner.

Additionally, the policy's cash value can be used as collateral for a loan. If the policyowner borrows from the policy, interest is charged at the rate specified in the policy. Any money owed on a policy loan is deducted from the benefits upon the insured's death, or from the cash value if the policyowner surrenders the policy for cash.