Ordinary Life Insurance is in effect for the rest of your life, unless you cover the value of the policy or fail to pay insurance installments.
The monthly payments for an Ordinary Life Insurance is generally guaranteed throughout the life of the policy. The insurance fee is used to pay the death benefit, the insurance costs, the expenses and profits of the insurer and to increase the cash value.
Some Ordinary Life Insurance policies are participatory. This means that they could pay policyholders an annual dividend. Typically, you can choose whether you receive the cash dividend, add them to the cash value of your policy to purchase additional death benefits, or use it to pay future insurance premiums.
Dividends are not guaranteed. Some policies do not pay dividends according to the amount projected by the company, while others may exceed the projection. Before buying a policy, ask for the company’s projected dividend history compared to the dividends actually paid.