Whole Life Insurance

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One of the three main subcategories of permanent life insurance, whole life pays only on the death of the insured person. The premium amount is fixed, and in order to maintain that constant premium the insurance company charges relatively more in the early years than it would charge for a term life policy for someone the same age. However, when the person gets older, the whole life premium - which is still unchanged - is now relatively less than would be charged for a term life policy. This type of policy also builds up a kind of savings fund that is known as cash value. See also Universal Life Insurance and Variable Life Insurance.