| With whole life insurance, the policy holder pays a level premium on a yearly basis. The policy generally covers until the end of the person's life—age 90 or 100. In most of the cases, the policy holder is overcharged for the premium, and the extra amount goes into an interest-bearing dividend account known as a cash value account. The customer can use the money in this account to pay future premiums, or can withdraw it or borrow against it to cover living expenses. With a variable whole life policy, the individual controls the investments made with his or her cash value account. Selecting certain kinds of investments, such as mutual funds, may allow the policy holder to increase the balance in the account considerably.
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