Whole life insurance, is a life insurance policy that remains in force for the insured’s whole life and requires (in most cases) premiums to be paid every year into the policy. There are several types of whole life policies most common whole life insurance policies are participating or non participating whole life policy. Whole Life insurance provides with the certainty of a guaranteed amount of death benefit and a guaranteed rate of return on your cash values. And premium in whole life policy are guaranteed to never increase for life.
With participating whole life insurance policy clients have an opportunity to earn dividends. Whole life policy guarantees a minimum death benefit and cash value, dividends made from the participating insurance policy can give the opportunity to receive an enhanced death benefit and cash value growth. Dividends are a way for the company to share part of its favourable results with policyholders. These dividends are not guaranteed and are based on the performance of funds they are invested. All the dividends, if left in the policy, can provide an offset (and more) to the eroding effects of inflation on your coverage amount.