Whole life insurance policy provides life cover throughout the life of the policy holder. The Sum assured in this plan along with bonus will be paid to the Nominee in case of the death of the policy holder at any time during the life of the Life assured. This policy serves the dual purpose of savings and protection.
WHAT IS WHOLE LIFE POLICY
Whole life policy is an insurance policy where the Life assured has to pay Premiums during his life time or for the selected limited period. The life cover will be there throughout his life. In case the Life assured survives up to an age of 100 years, then the Sum assured along with the bonus will be paid to him/her as the maturity benefit, and the policy comes to an end.
The greatest benefit is that the life cover would be there throughout the life.
Tax benefits can be availed as long as the Premiums are paid.
This policy creates a hassle-free estate for the family members in the event of death of the policy holder.
The Premium remains unchanged throughout the term of the policy.
In case the policy holder survives or lives up to age of 100 years, the Sum assured along with bonuses will be paid to the policy holder on his/her 100th birthday.
The bonus rates are higher in these policies when compared with the other types of life insurance policies.
Loan is available against this policy after payment of at least 3 years Premium.
It allows the policy holder to opt for withdrawal of cash at any time after payment of minimum stipulated Premiums.
There is an option to widen the coverage by opting for Riders which include double accident benefit, critical illness and Permanent total disability benefit by paying additional Premium.
The Premiums under this plan can paid in a single one-time payment or regular payments which are monthly, quarterly, half yearly or yearly in nature. There is also a provision for limited payment option which permits an individual to pay the Premiums for a limited period of time, for ex. 5, 10 or 15 years but offers full insurance cover for the entire Policy term.
This policy can be covered under the section 6 of Married Women Property (MWP) Act.
MODES OF PAYMENT
The Premiums under this plan can be paid in a single one-time payment or regular payments which are monthly, quarterly, half yearly or yearly in nature.
There is also a provision for limited payment option which permits an individual to pay the Premiums for a limited period of time, for ex. 5, 10 or 15 years but offers full insurance cover for the entire Policy term.
WHO SHOULD BUY Those who have dependents and want to create financial security to the family members can prefer whole life policy, as there is a hassle free transfer of the money to the Nominee
The whole life policy enables the Life assured to leave a big corpus to the family members.
Most common Riders in whole life Insurance are:
• Accidental Death Benefit Rider
• Accidental Total and Permanent Disability Rider
• Critical Illness Rider
• Waiver of Premium
• Hospital Cash Rider
HOW MUCH COVER YOU NEED
The minimum insurance one should have is 10 times of the annual income.
It is advisable to go for limited payment whole life, as the Premium paying responsibility will be over earlier and the Life assured can have protection throughout the life.
This policy not only offers protection but also offers Tax benefits under sec 80C, for the Premiums paid.
The Death Benefit paid in case of death of the policy holder is exempted from sec 10(10D) of Income tax act 1961.