Permanent life insurance that provides for the payment of the face value upon
death of the insured, regardless of when it may occur. This contrasts with term
insurance, which pays benefits only if death takes place during the limited
term of the policy. Under whole life policies, the insured pays a level premium
rate all of his or her life. This approach results in an overpayment of
premiums in the early years of the policy and an underpayment in the latter
years, which averages out over the life of the policy. Whole life insurance
also accumulates a cash value that the insured may borrow or otherwise use.