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What is a Whole Life Insurance Policy?

A whole life insurance policy or permanent life insurance provides life coverage until the death of the life assured. The policy stays in force throughout the life as long as the life assured pays the premium. The sum assured or the coverage is decided at the time of policy purchase and is paid to the nominee at the time of death claim – when the life assured dies. Usually, the maturity age is 100 years.If the life assured dies before the age of 100 years, the nominee receives the sum assured. However, if the life assured outlives the age of 100 years, the insurance company pays the matured endowment coverage to the life insured.

Whole Life Insurance in India

Who Should Opt For a Whole Life Policy?

Whole life insurance is a suitable form of protection for a number of individuals. Every earning individual should plan to provide financial protection to their family.

  • Individuals who wish to provide a legacy to their heirs.
  • Financial portfolio should consist a whole life plans too, as it provides an opportunity of returns along with the life coverage.
  • Be financially independent after you retire, as a whole life plan comes with a partial withdrawal option.
  • Someone who is keen on TAX SAVING PLANS, whole life plans are good to have, as all the premiums paid are tax exempted.

Whole Life Insurance FAQs

Why Whole Life Insurance is a good option?

It covers the life assured until he dies or for whole life or till age 100. Plus, it gives an opportunity to leave a legacy for your heirs.

Can I borrow money against the whole life insurance policy?

Yes, you can borrow loan against your whole life insurance policy provided it has acquired a surrender value.

Should I buy whole life insurance for my child?

No. It is not necessary, to buy it for your child. The main purpose is to provide the death risk coverage to the breadwinner, as an untimely death of the breadwinner could put the family in financial crunch.

Is whole life insurance a good investment for retirement?

Yes, as whole life provides a facility of partial withdrawal any time after the completion of premium payment term, whichever comes later. These withdrawals may have bonuses, overall it supports your retirement planning.

What is the maximum amount I can avail as tax benefit?

As per the Section 80C of Income Tax Act, 1961, all the premiums paid towards the policy are tax exempted. The maximum amount that you can avail is Rs.1,50,000.

Is Whole Life Insurance suitable for senior citizens?

No. But, if purchased at an early stage of life, helps in retirement planning.

How can I pay premium after I retire?

You don’t have to pay premiums. As by the time one officially retires, the premium payment term is usually over. So, you need not worry.

What if I surrender the Whole Life Insurance policy?

In this case, the life insurance company will pay you the surrender value. It may differ from one to another.

How much coverage should I opt for while buying Whole Life Insurance?

You must assess your needs, check the disposal amount to pay as premium amount, analyze the money you may wish to leave as a legacy, consider inflation too before you fix the coverage. However, it is generally suggested to opt for a coverage as 15-20 times the annual income.

Are there any riders available with Whole Life Insurance?

Yes, most of the life insurance companies do offer riders under whole life insurance plan. There are many different riders available, however, the most common ones are:

  1. Accidental Death Benefit
  2. Accidental Total and Permanent Disability
  3. Waiver of premium
  4. Critical illness

What is the Eligibility Criteria to Buy Whole Life Insurance?

The life insurance policyholder should be financially independent and must be above the age of 18 years. The maximum entry age is 60 to 65 years of age.

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