Whole life insurance is a form of permanent life insurance and it covers your entire life. In this insurance the death benefit and the premium charged from you usually remains the same as well. The death benefit is guaranteed and the same amount will be paid to the beneficiaries if you die anytime in your life. Some whole life insurance rates may increase but it will be written in the contract upon what conditions and how much wit can increase. Not only this, being a permanent life insurance, the whole life insurance also builds up cash value which is tax deferred till the time you decide to withdraw it. You can borrow money against this cash value and use it for many purposes. The cash value that is built up in the insurance is the return on premium. Remember the premium you pay is invested by the insurance company and it gives you incentive of paying some portion back.

Whole life Insurance Options

Whole life insurance available in several forms tailored according to the needs of different sets of people. These include traditional, single premium, interest sensitive whole life insurance, non participating whole life insurance and participating whole life insurance.

Traditional

In traditional whole life insurance the rate of return given to you against the cash value built up in your insurance policy has a certain guaranteed minimum that you must receive.

Single Premium

The single premium whole life insurance allows an upfront premium and is suited for people who have a lot of money and can purchase make a large down payment. Not only this single premium insurance is a permanent insurance and accumulates the equity as well which is tax deferred.

Interest Sensitive

The interest sensitive whole life insurance works like an adjustable mortgage in the cash value portion has a variable rate. By adjusting the rate of return you can increase the death benefit without putting any affect on your premiums.

Non-Participating

The non participating whole life insurance doesn't allow any key factor to change once the insurance is issued. These factors include the cash surrender, the death benefit insurance company will pay and the premium which the insured has to pay. All of them are determined before the contract is signed. The company uses several techniques for calculating the risks against the estimates of actuaries. In case any time, after the insurance is issued, there is some underestimate on claims by the insurance company then the company cannot charge you any extra money and they have to make up the difference. If the estimates come out to be higher and the premium charged from you was higher then should have then the company will not pay you the difference.

Participating

In participating insurance policy any excess profit or dividends that a company earns from investments will be shared with the insured. If the company is successful in investments then the benefits will much higher for the insured.

Other Options

Insurance companies also provide the term riders option in which certain short term policies can be added in the whole life insurance policy on temporary basis. Some companies also provide the spousal or child riders which allow the insured to add them in their policy.