Insurance Policies Classified According to the Term

Under this heading contracts may be classified as "whole" or "straight-life policies", and "term policies", the first implying that the policy continues during the whole of the insured's life and that the face value is payable only at death, and the second referring to a policy payable only if death occurs during a stipulated period, such as five, ten, fifteen, or twenty years. A whole-life policy may be defined as a "term policy for the whole of life" while a term policy, as understood in life-insurance terminology, is one written for a definite period of years. It should be noted, however, that where the company is a mutual one the divided distributions on the whole-life policy may be allowed to remain with the company with a view to shortening the time of maturity of the contract. In other words, the dividend accumulations, if left with the company, may be used to. terminate the policy for its face value at a given date although,death may not have occurred by that time.