Whole Life Insurance
Unlike term insurances, these policies remain active until they mature. Yet, they can lapse due lack of premium payments. These insurances offer the benefits of term policies and also allow growth of capital.
The insurer can only cancel these policies in the event of a fraudulent application. This too must be within a period defined by law. So, Permanent or Whole life policies pay the death benefit whenever the insured dies. Hence, there is no fixed term.
There are 2 main types of whole life insurance companies: Mutual and Stock.
Stock insurance companies - is a corporation owned by its stockholders or shareholders, and its objective is to make a profit for them.
Policyholders do not directly share in the profits or losses of the company.
Mutual insurance companies - is a mutual insurance company is an insurance company that is owned by policyholders.
Mutual insurance companies provide insurance coverage for its members and policyholders, and its members are given the right to select management.
Mutual insurance companies make mutual fund type investments into portfolios and any profits returned to members as dividends or a reduction in premiums.