Whole life insurance is exactly what it says it is: it is an insurance plan covers you for your entire life. This is by far the most popular type of life insurance because people want to know that their entire life will be covered for an unexpected death, not just a period of time. When life insurance plans started most of them were term life insurance plans which only cover you for the amount of time stipulated in the contract. It could have been five, ten or twenty years. While the premiums were cheaper with term life insurance, people didn't like it because if they survived the length of the contract they'd have nothing to show for all the premiums they paid. Worse off, if they wanted to get a new contract the premiums would be much higher because the person would be older and more at a risk for death.
A great aspect of whole life insurance plans is that the policyholder will only have to pay the premiums until a certain age. Once they reach the age stipulated in the contract they will no longer pay any premiums but they will still be covered so if a death does happen the family will receive a lump sum of money from the insurance provider.
There are different ways in which you can pay your premiums. All of them will be stated in your contract so it's a smart idea to find the best payment method for you. Some people pay their premiums all at once while others prefer to pay it monthly. Either way you will still be getting coverage.
One thing to keep in mind is that if you cancel your policy you will still get the premiums that you had paid over the period of time you were paying. But if you've only been paying premiums for a few years, you most likely won't get anything back. The insurance company will take out deductions which can equal what you paid. The longer you've been paying premiums the less the deductions will be because insurance companies are at more of a risk during the first few years of the contract. But over time they can recover the money which will make you deductions lower.
There are different plans you can choose when getting whole life insurance. The most common ones that people use are interest-sensitive, traditional, and single payment. With the first two plans you will have to pay a monthly premium. The advantage to this is that with both options you are guaranteed some return. With interest-sensitive you will get higher returns where as with traditional life insurance will only get you your minimum rate of return. With single payment plans you pay a lump sum up front and don't have to worry about paying any more premiums. All three of these ways of paying have their own advantages and you need to find out which one is better suited for your life.
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