Useful Terms and Definitions

What is Whole Life insurance?

• Insurance for the whole of life
• Level premium throughout the life of the insured – 20 year pay or pay to age 65.
• Premium in the early years is more than is needed to cover the risk
• Difference is invested to form a policy reserve for premium needed in later years
• Takes care of increasing risk of death with age (1 per 1,000 @ 25, 145 per 1,000 @ 85)