Whole Life Insurance

The Whole Life Insurance Plan, popularly known as Traditional or Permanent Life Insurance, offers comprehensive coverage for the insured's life, provided the premiums are paid every year. In addition, an individual with a Whole Life Insurance Plan can withdraw the policy anytime or even borrow against it.

The maturity for a Whole Life Insurance Plan is 100 years. However, the policy can be endowed upon maturity if the policyholder lives past the maturity period. It also offers tax-free death benefits to the insured and maturity and survival benefits.

How does it work?

The Whole Life Insurance Plan is tailored to help you create financial stability and also ensures that you remain covered for the rest of your life. According to an individual's need, they can choose any plan they wish to purchase, as Life Insurance Companies offer many policies.

Some of the amount from the premium paid by the customer is used to offer protection, and the rest remains with the company as an investment. The company also provides a bonus to the insured if profit is earned. The value of the amount invested grows. The policyholder can also choose to withdraw the policy.

Features of Whole Life Insurance Plan

The Whole Life Insurance Plan comes with very distinctive features. It provides comprehensive life coverage to the insured. In case the insured is no more, the insurance amount goes to the nominee. Some of the Whole Life Insurance Plan features are as follows:

Guaranteed Fixed Premium:

The premium insurance rate on this policy remains the same throughout the policy and does not fluctuate.

Life Protection:

Whole life Insurance Policy is tailored to protect the family of the insured in the form of guaranteed payment and bonuses (if any).

Death Benefit:

The insurance company will pay the death benefit to the nominee in the event of the insured's untimely demise during the tenure of the policy. Upon payment of all premiums, the insurance company pays the death benefit as the sum assured amount to the beneficiary of the policy.

Tax Saving:

According to sections 80C and 10 (10D) of the Income Tax Act 1961, the premium paid towards the policy and maturity proceeds are tax exempted.

Facility of Loan Availability:

The plan offers a loan against the policy to the insured upon completion of 3 years. 

It is recommended to contact your insurance provider for a better insight to choose the best plan from the different types of Whole Life Insurance Plan available. 


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Advantages of Whole Life Insurance Plan

Source of Cash:

The Whole Life Insurance Policy accumulates cash throughout the term, which helps the individual tackle any monetary issue in the future. Through this, a person can achieve their long-term goals in terms of finance.

Loan Availability:

As the policy term is of 100 years, an individual can avail loan against the policy upon completion of 3 years. Also, the premiums need to be duly paid every year.

Beneficiary Benefits:

Whole Life Insurance Policy is the best plan if an individual wants to provide financial security and stability to their family and loved ones. It serves a great purpose in financial planning.

Fixed Premium:

By taking the policy at a very young age, the premium's low cost is locked, so the policyholder does not have to pay a huge sum as a premium.

Entire Life Coverage:

The term would end only after the policyholder's demise. In case of any illness or disease, the premium will not be cancelled. Hence, it gives lifetime coverage to the insured and their family (in the absence of the policyholder).


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Types of Whole Life Insurance Plan

A Whole Life Insurance Plan is categorized into five types:

Participating:

Participating in a Whole Life Insurance Policy provides a bonus to the policyholder. However, there is no guarantee the policyholder will surely get the bonus. Bonus depends on the profit earned from investments, saving from expenses, and many others. If the dividend is paid to the customer, they can use it to purchase additional benefits to enhance the face value of the coverage.

Non-Participating:

Non-Participating Whole Life Insurance does not pay any dividend, and the insured does not receive any bonus as well. This is a low-cost fixed plan, with face amount and level premium features.

Single-Premium:

Under this policy, the insured are required to pay the amount at one time. The payment must be made at the time of the issuance of the policy so that no amount is paid further. It is considered more as an investment rather as insurance.

Limited Payment:

Under this category, the policyholders are required to pay the premium for a limited time period and can get coverage for up to 100 years. The plan allows you to pay the premium during a time when you are financially sound and in a better position to pay your premiums. This is best for those who think that they might be stable after a few years. The policy might also have a maturity benefit.

Pure Whole Life Insurance Plan:

The premiums under this plan are paid continuously, as long as the insured lives. The insured is paid the risk-benefit throughout the life, and the sum assured is payable after the death of the insured.

Inter-determinate Premium:

The Inter-determinate premium is somewhat similar to the Ordinary Whole Life Insurance Policy, which allows the insured to adjust their premiums. The insurance company will charge a premium based on the estimated earnings, expenses, and mortality from the insured. If there are any changes, the insurance company will adjust, and the insured will be charged according to the changes.


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Types of Whole Life Insurance Plan

Plans Minimum & Maximum Age Maturity Age Policy Terms Sum Assured
India First CSC Shubhlabh Plan 18-55 Years 65 Years 10-15 Years Depending on the Age of the Insured
HDFC Life Sampoorn Samridhi Plus 30-60 Years 75 Years 15-40 Years Minimum Sum: 1,00,000 Maximum Sum: No Upper Limit
Aegon Life Guaranteed Income Advantage Insurance Plan 20-25 Years 85 Years 85 – Entry Age Minimum Sum: 1,00,000 Maximum Sum: No Upper Limit
IDBI Federal Whole Life Insurance Plan 30-60 Years 100 Years 100 Years Minimum Sum: Depends on the Age of the Insured Maximum Sum: No Upper Limit
Max Life Whole Life Super 18-50 Years 100 Years Up to 100 Years of Age Minimum Sum: 50,000 Maximum Sum: No Upper Limit
SBI Life – Shubh Nivesh 18-60 Years 100 Years Up to 100 Years of Age Minimum Sum: 50,000 Maximum Sum: No Upper Limit
TATA AIA Life Insurance Fortune Maxima 30 Days-60 years 100 Years 100 Minus (Issue Age) Single Pay

IndiaFirst CSC Shubhlabh Plan:

IndiaFirst CSC Shubhlabh Plan is fit for those who want to start small.

HDFC Life Sampoorn Samridhi Plus:

HDFC Life Sampoorn Samridhi Plus offers the flexibility to stretch the insurance up to 100 years. The policyholder needs to pay the premium for only the policy term (minus) – five years. The policyholder can avail the benefit of profit participation and guaranteed addition for the five years.

Aegon Life Guaranteed Income Advantage Plan:

Aegon Life Guaranteed Income Advantage Plan offers the benefit of receiving yearly payouts after the policy ends. In addition to this, the plan also offers riders benefit, which the policyholder can avail depending on the requirements.

IDBI Federal Whole Life Insurance Plan:

IDBI Federal Whole Life Insurance Plan offers a lump sum of money benefits when the premium term ends. Policyholders can also avail the Accidental Death Benefit under this plan.

Max Life Whole Life Super:

Max Life Whole Life Super assures up to 100 years of the financial cover. In addition to this, it offers bonuses, maturity benefits, death benefits, and tax-saving benefits. 

SBI Life – Shubh Nivesh:

SBI Life – Shubh Nivesh Plan is best for individuals between 18-50 years. This plan also gives the benefit of income, savings, and insurance.

TATA AIA Life Insurance Fortune Maxima:

TATA AIA Life Insurance Fortune Maxima ensures the financial stability of the insured's loved ones. This plan covers future aspects such as retirement planning, child education, and many more.


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Add-ons Available on Whole Life Insurance Plan

Under this, if the insured passes away or is disabled due to some injury, the premium payable is waived off. However, the policy will remain active until the term ends. 

If the insured has a child after they purchased a policy, then Policy Purchase Rider would help them extend the coverage.

This add-on plan covers all the expenses necessary during any critical health issue, such as undergoing an operation or any kind of disease that might take away the ability to earn again.

Accidental Death Rider pays the amount to the nominee in case of the untimely death of the insured. The nominee will receive the accidental death benefit along with the sum assured at the time of the policy.

In the case of permanent or temporary disability, the insurance company will pay the income to the insured for a certain period of time. However, Disability Rider depends on the type of disability the insured has.

If Income Benefit Rider is availed along with the Whole Life Insurance Policy, then in case of the demise of the insured, the nominee will receive the one-time payment guaranteed through installments on monthly/yearly mode.

Eligibility Criteria to Apply for Whole Life Insurance Plan

Below are specific criteria that an individual needs to meet for applying the Whole Life Insurance Policy:-

  • The minimum age to apply is 18 years old. Also, some plans are available for infants of 30 days, or less
  • You must not be older than 60 years to qualify for the plan.
  • A maximum of 100 years is the age for maturity.
  • Depending on the policy, you may pay the premium as a one-time payment, installment payment for a limited period or the entire period of the coverage.

However, the eligibility criteria differ according to the insurance company. Therefore, it is highly recommended to get in touch with the insurer directly to know more about the eligibility criteria.

How to calculate the Whole Life Insurance Policy?

Several Whole Life Insurance Policy calculators are available over the internet to help you calculate the premium and sum assured. However, to better calculate the term and the premium, contacting the insurance provider is the best option.

Difference between Term Insurance and Whole Life Insurance Plan

There is a vast difference between Whole Life Insurance and Term Insurance. An individual should be aware of the difference between the two before purchasing insurance. Some of the basic differences are as below:

Points Whole Life Insurance Term Insurance
Aim Insurance + Saving and Investment Simple Life Insurance
Understanding Comprehensive Easy to understand
Premium Cost High premium Low premium
Premiums Remain same Might fluctuate
Renewability No need for renewal Need to renew
Value of Cash Yes No
Tenure Lifetime Fixed
Rider Yes Yes
Lapse Does not lapse as long the premiums are duly paid Lapses if not renewed
Maturity Benefit Yes No
Death Benefit Yes Yes
Tax benefit Yes No
Yes Yes No
Questions about Car Insurance

Whole Life Insurance FAQs

If you are looking for an insurance policy that can give you lifetime coverage and the death benefit and bonus, Whole Life Insurance Policy is the one for you. 

Most life insurance providers determine the premium rate based on a number of factors, such as the sum assured opted for, the buyer's age, and the riders added. In addition to providing extended coverage, whole life insurance plans also accumulate cash values, so their cost is likely higher than some alternatives.

Many insurers provide Life Insurance Policy on their official website. You can even apply through any third-party website. However, it is mandatory to read the terms and conditions of the policy thoroughly before applying for the same. 

It is very important to look for a good insurance provider. The following are the points to be considered while choosing an insurance company:

History of the Company

Customer Care 

Claim Ratio Settlement

Persistency Ratio

Yes, many insurers in the market provide the facility to convert the Term Insurance Plan to a Whole Insurance Plan. But remember, once it is converted into the Whole Life Insurance Plan, you need to pay a higher premium than Term Insurance Plan.