A whole life plan offers protection for life. When you buy a whole life plan you buy it with the intention of paying [or setting aside] the premium throughout your lifetime.
The premium usually remains unchanged and stops to be payable at a specified age e.g. 85.
Although the yearly premium for a whole life plan can initially be several times higher than for a corresponding amount of term insurance, this can be deceptive. That is because if you were to keep renewing the term insurance, the yearly premium you would find yourself paying in later years would be higher than if you’d bought a whole life plan in the first place.
Moreover, whole life plan contains an important savings element. What happens is, a portion of the excess of the whole life premium – over and above the term premium – is accrued by the policyholder as savings, commonly known as its Cash Value.
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