Whole Life Insurance
This life insurance category provides lifetime insurance coverage for policyholder upto his/her 100 years of age.
What is Whole Life Insurance?
This life insurance category provides lifetime insurance coverage for policyholder upto his/her 100 years of age. So, essentially the insurance coverage is provided till demise, provided the policyholder has paid all the premium amounts in the tenure. However, when the policyholder passes away during the policy tenure, then his/her beneficiaries receive the death benefit. The policyholder can select the sum assured based on his requirements from a range of policies available under this segment from different insurance providers. The policy is also called a permanent life insurance policy, as the policy provides coverage as long as the policyholder lives.
How does the Whole Life Insurance Policy Work?
The policy is a perfect choice for people looking for a life insurance policy with lifetime coverage. With this policy, individuals need not be worried about purchasing alternative insurance policies. One can get both survival and maturity benefits by owning the policy. The premium amount is paid only until the first 10-15 years from purchasing the policy.
For example, when you buy a whole life insurance policy at the age of 35 for an assured amount of Rs 50 lakhs, then the policyholder will have to pay the premium amount until the age of 50. Even though the premium payment is made for 15 years, the coverage will last until the age of 100. It is the main reason why premium for a Whole life insurance policy is comparatively higher than other policies. Based on the individual’s requirements, one has to opt to buy the Whole life insurance plan.
From the premium paid every time, a part of the money goes into insurance, and the rest stays invested in the company. When the invested amount gains profit, the policyholder gets the bonus on it. If the investment continues to accumulate, the policyholder can either withdraw or wait till maturity.
Features of Whole Life Policy
Listed below are the features of buying a whole life policy,
The rate of premium does not change throughout the policy tenure. There wouldn’t be a hike or depreciation in the value of the premium amount paid for the policy...
The policyholder can avail a loan against the policy taken after the completion of 3 years of the policy.
The premium paid is eligible for tax benefits under Section 80C and 10(10D) of the Income-tax act 1961.
Benefits of Whole Life Policy
Type of Whole Life Insurance Policy
Why should one Opt for Whole Life Insurance?
There are several reasons why one must buy a whole life insurance policy. They are,
- The plans provide coverage for up to 99 years of age.
- The policyholder can enjoy a tax benefit up to Rs 75000 on the premiums paid.
- The individual can avail loan options by holding whole life insurance for more than three years.
- The plan is much efficient for people who buy it as early as possible. The individual will enjoy the benefits for a long run when bought earlier.
- The premiums are considerable while comparing it with the terms of the policy.