Whole Life Insurance

Whole Life Insurance, or Whole of Life Assurance (in the Commonwealth), is a life insurance policy that remains in force for the insured’s whole life and requires (in most cases) premiums to be paid every year into the policy.

There are several types of whole life insurance policies. New York State defines six traditional forms: non-participating (aka “non par”), participating, indeterminate premium, economic, limited pay, and single premium. A newer type is known generally as interest sensitive whole life. Other jurisdictions may classify them differently, and not all companies offer all types. It should be noted that there are as many types of insurance policies as can be written in their contracts while staying within the law’s guidelines.

Whole life insurance typically requires that the owner pay premiums for the life of the policy. There are some arrangements that let the policy be “paid up”, which means that no further payments are ever required, in as few as 5 years, or with even a single large premium. Typically if the payor doesn’t make a large premium payment at the outset of the life insurance contract, then he is not allowed to begin making them later in the contract life. In contrast, Universal life insurance generally allows more flexibility in premium payment.

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