What is Whole Life Insurance?
As the name suggests, a whole life insurance plan offers financial security and insurance coverage for the rest of your life. This type of insurance protects you and your loved ones by providing you with a life cover! for up to 99 years. This can safeguard the financial interests of your family in your absence.
What are the Key Features of Whole Life Insurance Policies?
Affordable Premiums
Whole life insurance offers insurance coverage! with affordable premiums for a lifetime. It is a cost-effective way to secure lifelong protection.
Financial safety net
A whole life policy ensures your loved ones have a dependable financial safety net in case of any unfortunate event, giving you peace of mind that they will be protected in your absence.
Sum Assured
Whole life insurance plans provide a substantial sum assured, that can help your family manage their day-to-day expenses as well as long-term financial goals in your absence.
Whole Life Coverage
With lifetime coverage ranging up to the age of 99 years, whole life insurance offers unmatched financial security.
Add-on Riders
Another benefit of whole life insurance is that you get to enhance your policy coverage with additional riders for a comprehensive lifelong protection.
How Does Whole Life Insurance Work?
Whole life insurance policies remain active from the day of purchase until the policyholder reaches the age of 99 years. The plan offers death benefit in case of an unfortunate event during the policy tenure, securing the financial security of your loved ones.
The life insured pays a fixed premium to the insurance company throughout the term. Whole life insurance policy coverage continues as long as all premium payments are made in full and on time. The coverage is discontinued upon the completion of the policy term i.e., when the policyholder turns 99.
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What are the different types of Whole Life Insurance Policy?
Whole life insurance can be categorised into the following types:
Limited Payment Whole Life Insurance
If you select limited payment whole life insurance, you need to pay the policy premium for a limited period during the policy term. In most cases, you can pay the premium for the first 10 or 20 years and continue to enjoy policy coverage for a lifetime. The premium may be relatively high for these plans as you have a limited period to pay the premium but the overall savings on premiums would be higher than a regular payment life insurance plan.
Single Premium Whole Life Insurance Policies
If you select single premium whole life insurance, you pay the premium in a lump sum as a one-time payment at the time of purchase. Moreover, your coverage remains constant for the entire policy term and the nominee enjoys uninterrupted financial protection.
Non-Participating Whole Life Policy
A non-participating whole life policy provides a fixed, guaranteed benefit* at maturity. It does not include dividends or bonuses from the insurer’s profits.
Modified Whole Life Insurance
If you select modified whole life insurance, you pay varying amounts at different intervals of the policy term. In most cases, the premium is relatively low at the beginning of the tenure and gradually increases with time. However, irrespective of the premium amount, your policy coverage and benefits stay the same for the whole term.
Variable Whole Life Insurance
A variable whole life insurance policy offers life cover for the entire policy term, protecting your loved ones against any financial contingencies in your absence. Additionally, it also helps you meet your investment goals by investing your money. You can invest in this plan to enjoy tax benefits, build savings, and ensure financial protection for your loved ones.
Joint Whole Life Insurance
A joint whole life term insurance covers two people instead of one. The premium is paid for both policy owners, and the sum assured is offered for both lives. The insurance payout is given on a first-death basis. These types of plans are suitable for couples planning to save for the financial needs of their children in their absence.
What is the difference between Term Insurance and Whole Life Insurance?
Choose Term Insurance if |
Choose Whole Life Insurance if |
---|---|
You are looking for a life cover` for shorter duration | You are looking for a lifelong life cover` |
You are not looking for any maturity benefit | You are looking for a cash value payout at maturity |
You are looking for lower premiums | You are willing to pay relatively high premiums due to the presence of savings component in the whole life insurance |
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Benefits of Buying Whole Life Insurance
Whole Life Cover - The policy covers you for 99 years. This protects your family for an extended period of time. Many people have financial dependents even in their old age, and such a policy can take care of their financial dependents
Level Premium - Your premiums remain fixed for the entire term of the policy, allowing you to benefit from an amount that will become lighter on your wallet over time. You also have certainty about the premium amount and hence can plan your expenditure accordingly
Tax#- The insurance premiums paid are eligible for deductions of up to ₹ 1.5 lakh under Section 80C and the maturity amount is exempt from tax# subject to Section 10(10)(D).
Whole Life Insurance Eligibility Chart
These conditions differ from one insurance company to another. However, the following eligibility conditions are there for ICICI Pru iProtect Smart
1. | Minimum Age of Entry | 18 years |
2. | Maximum Age of Entry | 65 years |
3. | Maturity of the policy | At the age of 99 |
4. | Minimum policy premium | ₹ 2400 |
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