Host: What are Whole Life policies?
Bob Ley: Whole Life policies are a type of permanent insurance which combines life insurance with a cash value fund. Here you are buying a policy that pays a stated fixed amount on your debt and part of your premium goes towards building cash value. Based on current Federal Income Tax Law, cash value builds tax deferred each year that you keep the policy and you can borrow against the cash accumulation fund without being taxed. The amount you usually pay doesnt change through out the life of the policy.