Definition of "Graded Premium Whole Life Insurance"

A life insurance policy that initially has a low premium, similar to term life insurance policy. The premiums gradually increase over a period of 15 to 40 or more years, then with one or more sharp rises level off. During the early years, the policy does not build cash value. When the premiums rise in later years, the cash value of the policy builds up very rapidly. Also see Life Product Comparison.