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Life insurance that provides coverage for the entire life of the policyholder, who pays the same fixed premium throughout his or her life. the policy builds up cash reserves that may be paid out to the policyholder when he or she surrenders or partially surrenders the policy or uses the cash reserves to fund low-interest loans. the annual increase in the cash value of the policy is not taxed. if the policyholder surrenders the policy, a portion of the payment is not taxable. also called straight life insurance or ordinary life insurance.

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