Whole Life Insurance Overview

This set of flashcards focuses on the essential vocabulary and key concepts related to whole life insurance, including its structure, options, and features.

Whole Life Insurance

A type of permanent life insurance that provides level protection with fixed premiums for the duration of the policy.

Premiums

Payments made by the policyholder to keep the insurance policy in force.

Level Premiums

Fixed premium amounts that do not change throughout the life of the policy.

Limited-Pay Life Insurance Policy

A policy designed for those who want permanent insurance but do not want to pay premiums indefinitely.

Cash Value

The amount of money that accumulates in a whole life insurance policy that can be borrowed against or withdrawn.

Policy Loans

Money borrowed against the cash value of the policy, which must be repaid with interest.

Paid-up Additions

A dividend option that allows policyholders to purchase additional coverage that increases the death benefit.

Reduced Paid-up Insurance

A non-forfeiture option that reduces the policy’s face value to the amount that can be covered by the current cash value, issued as a single-premium policy.

Beneficiary

The person designated to receive the death benefit from the insurance policy when the insured passes away.

Surrender

The option to terminate the policy and receive its cash value, if applicable.