Interest sensitive life
Cash Value Policies: Interest Sensitive Whole Life
Description Premiums Cash Value Advantages Disadvantages Uses
Like whole life, except that interest paid on the cash value is pegged to a specified financial measure (such as stock index or specified financial instrument) Level premiums Build-up influenced by interest credited on policy's cash value; Participating policies may have additional build-up Forced savings; Fixed premiums; Income tax advantages; Some protection against inflation Rates higher than Ordinary Life; Investment return usually marginal (but better in times of high interest rates) Conservative buyers wanting guarantees of Ordinary Life, but with some inflation protection