Disclosure Policy

Characteristics of the Whole Life Insurance Policy


The right insurance policy helps to provide financial support to the beneficiaries upon the death of the policyholder. The whole life insurance policy is an important insurance product that offers permanent insurance. Although the policyholder will be expected to pay higher premiums, there are added benefits including a cash surrender value, increased death benefits and premiums vanishing at a predetermined period. The characteristics of the whole life policy include:

  • Guaranteed premiums

The whole life insurance rate is expected to remain the same. Once your policy comes into effect, the premiums payable are fully guaranteed and you do not expect them to increase over time. The premiums are calculated based on the applicant’s sex, age and smoking status. Furthermore, an assessment of the applicant’s lifestyle and health determines the amount of premiums payable. Nevertheless, once the policy is in force for over two years, you can ask the service provider to review the risk classification. Therefore, if your health has changed since the application it is important to consider a further assessment.

  • Builds a cash value

A part of the premiums goes to build the cash value. This cash value is then paid upon the death of the policyholder or the maturity date upon which payments can be paid out. The 100th birthday is a common maturity date when the cash benefits are paid out. Many of the policies provide the option of taking out a short term loans against this cash value. Therefore, this is beneficial for any policyholder who may be in need of financial help. The loan can be repaid at a fair rate of interest to restore the policy. However, when the policyholder fails to repay the amount, the loan plus interest is offset from the payoff amount at the point of settling the claims.

  • Guaranteed benefits

When you fulfill your part of the bargain, you can expect to receive all the benefits, including the cash surrender values, policy loan provisions, extended coverage and paid-up values. However, they are restrictions on the benefits received in the event of non-disclosure. Therefore, it is important to disclose every fact that affects the contract. Failure to disclose can result in the cover being voided. Furthermore, if you commit suicide the benefits may be restricted.