Level premium whole life insurance builds a cash value for the policy holder because the insured overpays for the insurance coverage received.

Question

Quizplus · Accepted Answer

In level premium whole life insurance, the premiums are higher in the early years than what would be needed to pay for the pure cost of the death benefit. This overpayment is set aside and accumulates as cash value, which the policyholder can access under certain conditions.

Level Premium Whole Life Insurance Builds a Cash Value for the Policy