Whole Life Insurance Policy – Benefits, Prices, Types, Riders

Buying life insurance is important as it ensures that you are financially secure to face any type of problem in life. If you are aiming to create a beneficial legacy for your family, you should consider life insurance. There are different kinds of life insurance plans but whole life insurance provides coverage to the policyholder for 99 years. It offers guaranteed death benefits to the nominee of policy in case of the unfortunate demise of the policyholder.

What is Whole Life Insurance Policy?

Whole life insurance is the extension of the term insurance policy. In this plan, the insurance coverage is provided till the death of the policyholder or till attaining 99 years of age. Since the coverage is for a complete lifetime, it is known as Whole life insurance. While the term insurance policy has a particular period for which the coverage is offered the whole life insurance policy is covered for the lifetime of the policyholder.

All the other terms and conditions would be the same as the term insurance policy except for the fact that the chances of getting the claim are higher in the whole life insurance as the coverage is till the death of the policyholder. Since the coverage is till the death of the policyholder, Survival benefit would be possible under the whole life insurance policy in rare cases if the policyholder survives the policy period.

How Does Whole Life Insurance Work?

Understanding how whole life insurance plans work can help you decide which plans are fit for you. Whole life insurance works similar to a term insurance plan which is a specifically designed life insurance plan which aims to provide whole life cover to the policyholder so that they can live a financially secured life and create financial support for the future, in case of accidental death.

Whole life insurance plans not only provide death benefits but also provides survival and maturity benefit to the policyholder. Every year, the policyholder pays a premium. In this premium amount, some amount is used for providing protection, and the remaining stay invested in the company. If a profit is earned, the policyholder is entitled to get the bonus on the invested amount. The investment grows in value and is returned to the insured if he selects to withdraw or live till the maturity of the plan.

Types of Whole Life Insurance Plans

There are different types of whole life insurance plans available in the market such as

Non-Participating Whole Life Insurance:

This plan is a traditional life insurance policy. It has a level premium and face amount during your entire life. The cost of non-participating whole life insurance policy is low and fixed costs and relatively low out-of-pocket premium payments. As a non-participating policy, the plan does not pay any dividend and does not receive any bonus facility.

Participating Whole Life Insurance:

This plan is also a traditional life insurance policy. Participating whole life policy pays dividends and offers benefits along with bonuses. In participating whole life insurance, the premium paid by the insured is invested by the company; the profit earned through the investment is paid as bonuses to the policyholder.

Level Premium Whole Life Insurance:

In this plan, the premiums are paid by the insured throughout the life until death. Risk-benefit is for the entire duration of life and the amount of sum assured is paid after the death of the insured.

Limited Payment Whole Life Insurance:

In this plan, the insured person will be required to pay premiums for a limited period and receive lifetime protection. In this type of life insurance plan, policyholders have to pay premiums for a specified number of years like 10 years, 20 years, etc.

SinglePremium Whole Life Insurance:

In this plan, the entire premium of the life insurance policy is paid in a single lump sum and it is considered as an investment insurance product. In a single premium whole life insurance policy a large sum assured amount is paid as a guaranteed payment to the beneficiary of the policy.

Indeterminate Whole Life Insurance:

This plan is an ordinary whole life insurance policy. It offers policyholders the option of adjusting their premiums. Based on its estimate of its current earnings, cost of expense and mortality, etc. In case there are any changes the insurer will charge policyholders the present premium amount.

Who Should Buy Whole Life Insurance Policy?

A whole life insurance policy is preferred by a person who wants to cover their entire life against any unfortunate events and to pass the proceedings to their grandchildren. Technically the life insurance coverage should only be up to the age of 60 years or till the age of retirement. The need for financial security to the family arises if a person is working and after retirement, there would be retirement regular income which would be sufficient for the family and one achieves their financial milestones before retirement.

For instance, let us assume that a person wants to take a whole life insurance policy, and then he has the option to pay the premium for a particular period of years, say 5 years, and enjoy the coverage for whole life or pay the premium in regular instalments. In case of the death of the policyholder at the age of 80 years, the claim proceedings are paid to the family of the policyholder which can act as a pension amount to the spouse.

A Whole Life Insurance policy can be beneficial for certain individuals in India, depending on their financial goals, responsibilities, and preferences. Here are some scenarios in which individuals might consider purchasing a Whole Life Insurance policy:

  • Individuals with Dependents: If you have dependents such as a spouse, children, or elderly parents who rely on your financial support, a whole life insurance policy can provide lifelong protection and ensure their financial security even after your passing.
  • Supplemental Retirement Income: Some individuals use the cash value component of a whole life insurance policy as a source of supplemental retirement income, especially if they have exhausted other retirement savings options.
  • High-Net-Worth Individuals: Individuals with significant assets may consider whole life insurance as part of a comprehensive estate and wealth management strategy.
  • Long-Term Financial Goals: If you have long-term financial goals, a whole-life policy's permanent coverage and cash value growth can be advantageous.
  • Tax Benefits: These plans offers tax advantages, such as tax-free death benefits for beneficiaries and tax-deferred growth of the cash value component.
  • Individuals Seeking Financial Certainty: Whole life insurance provides stability with fixed premiums and a guaranteed death benefit.

Eligibility Criteria of Whole Life Insurance:

The eligibility criteria of whole life insurance are differing from one insurer to the other. To get the details about the eligibility criteria for your chosen policy, you are advised to contact Policybachat customer service which has a dedicated team of agents to assist the customer. here is the basic eligibility criteria:

Criteria Eligibility
Minimum Enter Age 18 years
Maximum Entry Age 65 years
Maturity Age 99 years
Premium Payment Term Limited pay, Regular pay

Features and Benefits of Whole Life Insurance Policy

  • Financial Protection: This policy helps to minimize the risk of financial difficulties which would be faced by the families in case of the sudden death of the policyholder. In whole life insurance, the insurance provider pays payment of guaranteed sum assured along with bonuses. As a result, even in the policyholder’s absence, his family stays protected.
  • Whole Life Coverage: It provides life cover to the policyholder until 100 years of age. It offers guaranteed death benefits to the nominee of policy in case of the unfortunate demise of the policyholder.
  • Guaranteed Premium: The premium interest rate of the life insurance policy is set for the entire tenure of the policy and it does not increase or decrease throughout the term period of the policy.
  • Tax Benefits: Life insurance offers tax dual benefits under prevailing laws as per Income Tax Act, 1961. The life insurance premium paid can be availed as a tax deduction under section 80C. You can avail of a deduction of up to Rs.1.5 lakh under Section 80C of the Income Tax Act. The maturity insurance plans may be completely tax-free. This tax benefit is under Section 10(10D) of the Income Tax Act.
  • Loan Facility:  The insured can opt for a loan facility against the whole life insurance plan. However, a loan can only be availed if the insured completes 3 policy years and if all the premiums of the policy are dully paid.
  • Long Term Savings: Apart from life insurance cover whole life insurance plans also offer you the opportunity to create wealth. These plans help you to make systematic savings and create wealth that can be used for your future goals.

Whole Life Insurance Calculator

The Whole Life Insurance Premium Calculator can be used to know your whole life insurance premium. A life insurance policy premium calculator is a tool that provides the premium for your life insurance policy according to the data entered by you. The online life insurance calculator is easy and hassle-free and can be used free of cost. An individual can personalize the life insurance calculator as per their requirement. After you get an idea about how much amount you have to pay for your family’s financial security needs, you can also analyze the coverage you get in the policy.

How to Buy Whole Life Insurance

The process of buying a life insurance policy online has become simple with PolicyBachat. Following are the steps to purchase a whole life insurance policy online:

  • Step 1: First, Enter details such as Gender, Annual income from all the sources, Alcohol consumption and tobacco consumption, type of occupation, salary, and Date of Birth. After this, you need to enter your contact details to facilitate a call from our agent.
  • Step 2: Now the premium from different insurance companies will be displayed on the screen. You can edit the details such as Coverage, Term, Premium payment method, Mode of claim settlement, etc. Submit the details to get the desired premium. The premium can be changed by changing other factors such as Coverage required, mode of payment, etc.
  • Step 3: The next step is to select the best whole life insurance plan and pay the premium using online payment methods.

Factors to Consider When Buying a Whole Life Insurance Policy

When purchasing a Whole Life Insurance policy in India, several factors should be carefully considered to ensure that the policy aligns with your financial goals and provides adequate coverage for your needs. Here are some key factors to keep in mind:

  • Coverage Amount
  • Premium Affordability
  • Cash Value Growth
  • Riders and Benefits
  • Surrender and Loan Provisions
  • Policy Flexibility
  • Underwriting Process
  • Financial Stability of the Insurer
  • Long-Term Goals

Top Best Whole Life Insurance Plans in India

Company Name Plan Name Premium
ICICI Prudential Life Insurance ICICI iProtect Smart Plan 548/- Buy
Max Life Insurance Smart Secure Plus Plan 589/- Buy
TATA AIA Life Insurance Sampoorna Raksha Supreme 692/- Buy
PNB MetLife Insurance Mera Term Plan 602/- Buy
Bajaj Allianz Life Insurance Smart Protect Goal 599/- Buy

*The above-mentioned values are for reference purposes only * Please refer to our website for exact values.

Whole Life insurance Riders

Whole life insurance riders help to enhance the protection provided by the policy. Here are the list of riders: 

  • Critical illness rider
  • Accelerated sum assured rider
  • Hospital cash rider
  • Partial/permanent disability rider
  • Premium waiver rider
  • accidental death & dismemberment rider

Whole Life Insurance vs Term Life Insurance

Parameter Whole Life Insurance Term Life Insurance
Benefits It offers two benefits of both savings and protection It offers only death benefits. There are no additional benefits
Tenure It has the option to change the tenure of the policy It has a fixed tenure option
Premium High premium compared to term life insurance Low premium compared to whole life insurance
Premium Pay-out There is premium pay-out if the policyholder survives the policy period There is no refund of premium until a claim made the death of the policyholder
Bonus The amount of premium paid by the customer is used for both providing protection, and investment. If a profit is earned, the policyholder is entitled to get the bonus on the invested amount There are no such kind features in Term life insurance
Loan Availability The policyholder can opt for a loan facility against the whole life insurance plan. No loan availability in term life insurance plan

Whole Life Insurance FAQ’s:

How to Use Whole Life Insurance to Create Wealth?

The whole life insurance policy provides life cover and financial protection for your family up to the age of 99 years. The policy then doubles up as an estate plan after your retirement. Thus, whole life insurance is a great tool for creating wealth.

Does Whole Life Insurance Pay Death Benefit and Cash Value?

Yes, whole life insurance death benefits to the nominee of policy in case of the unfortunate demise of the policyholder and you can acquire cash value after two consecutive policy years. If you need you can borrow money against the policy based on this cash value.

What Happens If You Cancel A Whole Life Insurance Policy?

When you cancel a life insurance policy, your nominee will no longer receive the death benefit when you die. If you had your whole life insurance for a long period you may also get some cash from the cash value of the policy.

Should I Get Term or Whole Life Insurance?

Term life insurance covers you for a specific period as per the policy term and offers a death benefit to the nominee in case of the death of an insured person. But the coverage ends, and the beneficiary doesn’t receive the money once the policy term expires. Whole life insurance is a type of permanent life insurance and the premiums of whole life insurance are much higher than term insurance as compared to term life insurance. This is because it offers lifelong coverage and offers a death benefit to the nominee in case of death of the policyholder.

What does Whole Life Insurance Mean?

Whole Life Insurance is a type of permanent life insurance that provides coverage for the entire lifetime of the insured individual, as long as premium payments are maintained. Unlike term life insurance, which offers coverage for a specific term, whole life insurance offers lifelong protection.

How to Get a Whole Life Insurance Quote Online?

You can get whole life insurance quotes online at the PolicyBachat website where you can compare multiple life insurance policies and their benefits, and prices from different insurers.

What are the Premium Payment Options in Whole Life Insurance?

  • Limited Premium Whole Life Insurance
  • Regular Premium Whole Life Insurance
  • Single Premium Whole Life Insurance

What is a Whole Life Insurance Plan?

A Whole Life Insurance Plan is a type of permanent life insurance policy that provides coverage for the entire lifetime of the insured individual. Unlike term life insurance, which offers coverage for a specified term, whole life insurance offers lifelong protection. This means that as long as the policyholder pays the premiums, their beneficiaries will receive a death benefit when the insured person passes away, regardless of when that occurs. Whole life insurance policies also build a cash value over time, which can be accessed by the policyholder during their lifetime.

Why Whole Life Insurance is Good?

Whole Life Insurance is considered good for several reasons:

  • It ensures that your beneficiaries receive a death benefit no matter when you pass away, providing financial security and peace of mind.
  • Whole life policies accumulate cash value over time, which can be borrowed against or withdrawn to meet financial needs during the policyholder's lifetime.
  • Premiums remain fixed throughout the life of the policy, making it easier to budget for insurance costs.

Conclusion

Life insurance is an important decision that should be taken after careful consideration. When choosing a whole life insurance plan, it is important to consider factors such as the amount of coverage needed, the premiums, and the terms and conditions of the policy. It is also important to compare different plans from different insurers to ensure that you get the best deal for your needs. By taking all these factors into account, you can make sure that you are getting a plan that provides comprehensive coverage at an affordable price.

PolicyBachat is an online insurance web aggregator which helps in selecting insurance policies online for its customers based on the customer’s requirements. Please visit our portal to compare insurance policies from top life insurance companies and select the best life insurance policy which fits all your requirements.

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