Whole Life Insurance

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♥ Whole Life Insurance ♥

Whole Life Insurance

Whole Life Insurance, What Is The Use Of Whole Life Insurance In Our Life, Why Should We Purchase Whole Life Insurance Policy? As Per The Name, The Meaning Of Whole Life Insurance Is To Protect Or Cover Your Entire Life. You Can Say That This Whole Life Insurance Policy Is Opposite Of Term Insurance Policy. Because Term Insurance Plan Covers A Certain Period Of Time Like 15, 25, 30, 45, Or So On But Whole Life Insurance Covers Your Whole Life Period Means How Much You Live It Will Provide You Protection i.e; Till Your Last Breath Of Life.

To Read More About Term Insurance Plan Click Here

There Are Many Reasons To Purchase Whole Life Insurance Plan As The Most Important Benefit Is That Whole Life Policy Has No Expiration Date. There Is Also No Fluctuation In The Premium Amount Of Whole Life Insurance Policy. In Some Cases According To The Terms And Conditions Of The Insurance Policy Is That You Can Use This Insurance Policy As A Property And Can Take Loan On The basis Of Your Whole Life Insurance Plan.

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Now Lets Have An Overview Of How Does Whole Life Insurance Policy Works And What Is The Process Of Work Of Whole Life Insurance Plan?

How Does A Whole Life Insurance Policy Works

Whole Life Insurance Policy Is A Unique Policy In Itself. As We All Know That Our Life Is Unpredictable And In The Journey Of Our Life This Whole Life Insurance Policy Gives A Whole Life Coverage And Gives You A Tension-Free Life Along With The Ability To Create A Property For Your Spouse And Children.

The Reason Being, It Comes With Not Only Death Benefits, But Also With Maturity And Survival Benefits Along With Bonuses, If Any. The Life Assured Is Covered Until The Death, And Also Has The Maturity Benefit Feature.

In The Category Of Whole Life Insurance Policy You Will Get Various Types Of Plans Like:

  • Traditional Whole Life Plan Or
  • Unit Linked Plan.

Traditional Whole Life Policy Is Further Categorised Into:

  • Participating And
  • Non-Participating.

For Better Understanding Of Any Policy Or Plan We Should Know The Features Of The Insurance Policy. So, To Understand The Whole Life Insurance Policy Let Us Discuss The Features Of Whole Life Insurance Policy.

how whole life insurance works

(Image Credits – thelifeinsuranceblog)

Features Of Whole Life Insurance Policy

There Are Various Features Of Whole Life Insurance Policy Which Are Stated Below:

  • Death BenefitsIn Case Of Life Assured’s Unfortunate Demise, Or Unfortunate Death Being In The Policy Period And The Policy Being Still In Force And All Payment Will Be Fully Paid To The Nominee.
  • Life Time ProtectionWhole Life Insurance Policy Gives A Whole Life Coverage And Gives You A Tension-Free Life With The Ability To Create A Property For Your Spouse And Children. However, The Whole Life Insurance Policy Also Delivers The Payment Of Assured Sums Together With Bonuses.
  • Guaranteed PremiumUnlike Other Insurance Policies The Premium For Whole Life Insurance Is Fixed And It Will Not Fluctuate With Market Changes Or Rising Prices.
    • For Example If You Are Paying Rs 2000 Per Month As A Premium For Whole Life Insurance Policy You Will Continue To Pay Rs 2000 Per Month Forever As Whole Life Insurance Premium.whole life insurance premium
  • Loans Can Be AvailedWhen Your Whole Life Policy Completes Its 3 Years, You Can Obtain A Loan Against Your Life Insurance Policy.
    • Similarly All Traditional Policies Like:
      • Endowment Plan,
      • Money Back Policy, They All Can Obtain Loans For You In Your Need Hour Against The Insurance Policy.
  • Tax Benefit: Whole Insurance Policy Holder Is Also Entitled To Tax Benefits. Under The Section 80C Of Income Tax Act, 1961. The Premium Amount Of Whole Life Insurance Policy Is Exempted As Well As The Pay-Outs Made To The Nominee/Policy Holder Is Also Tax Free Under The Section 10 (10D) Of Income Tax Act, 1961.

Like Other Insurance Policies Whole Life Insurance Policy Has Also Different types Of Whole Life Insurance Which We Have Discussed Below.

Types of Whole Life Insurance

types of whole life insurance

Basically There Are Two Types Of Whole Life Insurance Policy And That Is Participating And Non-Participating Whole Life Insurance Plan And Each Plan Have Their Own Different Features.

  • Participating Whole Life Insurance Policy: In This Plan, The Premiums Are Invested By The Company. The Profit Or The Excess Amount That The Company Has Earned Through Various Investments, Savings Left Out Of Cost Expenses, etc. Is Distributed As Bonus To All The Policy Holders.
    • However, There Is No Guarantee Of Bonuses Being Declared Every Year. But If Bonuses Are Declared They Become A Part Of Amount Payable And The Policy Holder Receives The Same As Per The Terms And Conditions Declared.
    • The Other Option Is, Bonus Declared Which Can Be Used To Purchase Paid-Up Additional Sum Assured, Thereby Enhancing The Face Amount.
  • Non-Participating Whole Life Insurance Policy: A Non-Participating Whole Life Insurance Policy Is A Low-Cost Life Insurance Policy With A Level Premium And Face Amount Feature. It Does Not Pay Any Dividends Nor Does It Receives Any Bonuses As It Is Non-Participating.
  • Single Premium: A Whole Life Insurance Policy Where A Large Sum Of Cash Is Paid As A Payment Guarantee To The Beneficiary. While A Single-Premium Policy Is Fully Funded, The Money Invested Builds Up Rapidly, Making Up A Quite Large Benefit Even In The Event Of Policy Holder’s Sudden Demise.
  • Level Premium Whole Life Insurance: In This Payment Plan, Premiums Are Paid Regularly Till The Insured Is Alive. The Premiums Remain Constant Throughout The Policy Term.
  • Limited Payment Whole Life Insurance: Under This Plan The Policy Holder Pays The Premium For A Limited Period Of Time. But, The Life Protection Cover Is For Whole Life Or Till The Age Of 100 Years Of The Insured. Premiums Payment Period Are Usually For A Fixed Number Of Years, Say 10 Years, 20 Years, Or So On.whole life insurance illustration example

Tips To Remember While Purchasing A Whole Life Insurance Policy:

  • It Is Important To Check The Solvency Or Credibility Of The Insurance Company. You Must Do Ample Research And See If They Are Able To Pay Off The Claims As Promised To The Investors. And Also Find Out The Age Of The Insurance Company.
  • You Should Have A Clear Idea As To Why You Need A Policy. Depending On Your Key Factors You Can Choose An Appropriate Insurance Policy.
  • You Should Also Have An Idea On The Total Insurance Cover You Require.
  • It’s Always Advisable To Choose A Cover Whose Premium Is Within Your Budget.

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