What is Whole Life Insurance Plan - Benefits, Eligibility

Hi dear reader, In today’s article, we will tell you what is a whole life insurance plan. How does it benefit you and your family members? All of you are requested to read this article completely from beginning to end.

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What is Whole Life Insurance Plan?

As the name suggests, you get the coverage of the whole life in the whole life insurance plan. Under this plan, the insured is given the option to pay the premium amount for a limited period of time.

Which we also know as maturity period, in this if the insured person reaches maturity period. So he has the option of life cover till death without paying extra premium amount and getting insurance amount or bonus amount.

If we compare whole life insurance plan with any other insurance plan. So you will find that the whole life insurance policy is completely different.

Basically you can buy a whole life insurance against one payment. Which can be paid on monthly or yearly basis. If you have purchased unit-linked whole life insurance policy.

So a part of your fund will be used for payment of insurance amount. The remaining part of the same is used as investment fund. Hope friends, you must have understood what is whole life insurance plan.

How many types of Whole Life Insurance Plan are there?

Many different plans of Friends whole life insurance plan are available in the market. Each of these plans has been designed in such a way that it can easily meet the different needs of different customers.

Non-Participating Whole Life Insurance Plan: Friends, a non-participating whole life insurance policy has a level premium and face value throughout your life. The best advantage of this type of policy is that, in this you get fixed costs and low premium payment. Now since this policy is non-participating it does not pay you any dividend.

Participating Whole Life Insurance Plan: Dividend is paid to you in Participating whole life insurance policy. The payment of dividend basically depends on the additional income, saving expenditure and the mortality rate of the organization collected by the company through investment. Therefore, in this you do not get any assurance that the insured will get the dividend.

But there is a possibility that the insured will receive the dividend in cash, which is used to reduce the premium payment amount. Or else its use can be allowed to be given interest at the specified rate. Dividends can also be used to improve the coverage value.

Who can take Whole Life Insurance?

Friends, you can invest in whole life insurance plan only if you –

If you have invested for your retirement and you are searching for any other option for big profit.
If you want to leave property and all your savings for your beneficiary. So you can invest in whole life insurance plan.
If you are young employee and you can make premium payment in long time period. So you must invest in it.

Benefits of Whole Life Insurance Policy?

Life Cover: By purchasing such a policy, any insured person can get important cover for a long time period. It is not like any other policy, where you are given the policy for a fixed period. Apart from this, where others policy expires after the fixed period and it becomes difficult to take any life insurance plan cover in old age. The same whole life insurance plan covers your whole life. In this, after the death of the insured, a lump sum amount is given to his nominee. Which helps them in maintaining the standard of living of him and his family members.

Coverage, Periodic Payment and Tax Benefits Assurance: Friends whole life insurance plan provides full lifetime coverage with limit premium payment period. The premium remains the same during the term of the policy, in which the insurance amount is guaranteed. On the other hand, bonus depends on performance, there are some companies that give you survival profit at the end of premium payment period on policy maturity. Under the Income Tax Act, you get tax benefits to the insured under section 80C and section 10D of 1961.

Source of Income: Friends, most of the insurance experts around the world say that a person should keep expenses of at least 6 to 8 months as a liquid asset. But while meeting retirement and long term savings goals, it becomes difficult to save such a huge cash amount. It is another matter that later you get the premium payment in the form of cash at the end of the period.

Loan Option: The surrender value of friends policy increases with time. Therefore, you can take a loan against the surrender value of your policy at any time. This is a good option to compare borrowing against a house or retirement account.

Your Dependents Will Benefits: Obviously friends, since this policy is for a long time period. So even if something happens to you tomorrow, the amount your family members will get. That amount will be very high, which helps them in maintaining their lifestyle and their standard of living. Friends, when it comes to property planning, this policy is very good for you. Especially those people who want to transfer their property legally to their heirs.

What is the Eligibility Criteria for Whole Life Insurance Policy?

Friends, the eligibility criteria or lowest/highest age entry, premium payment period etc. in whole life insurance policy are different from insurer to insurer.

Therefore, we advise you to contact your insurance company directly about the eligibility criteria of the policy you have chosen. Because he can give you better information about it.

What is the difference between Term Plan and Whole Life Insurance?

Premium: If we talk about premium then in term insurance plan you have to pay for a special period. Whereas for whole life insurance, you have to pay for your whole life.

Maturity Age: Most insurance policies cover the period from 65 to 75 years of age. But in whole life insurance policy, your whole life is covered.

Cash Value: Where no cash value is given to you in term insurance plan, on the other hand cash value is given in whole life insurance plan. Guarantee and non-guarantee cash value which is called dividend value is given to you.

Policy Period: Where the time period of the term policy can be from 10 to 50 years, in the same whole life insurance plan, this policy is given for your whole life.

Payment Value: No payment value or any other service is given in any way by the term policy holder on surrendering the policy. On the other hand, the payment of whole life insurance can be given after specified years.

Lapse Policy : The policy ends under 30 days after the premium payment of the term policy is missed. On the other hand, in case of whole life insurance policy, if the policy holder fails to make any payment. So cash value is allowed to offset the premium.

Here you can read more ….

Conclusion

So these were some differences friends between term insurance plan and whole life insurance plan which we have told you. If we have missed something somewhere and you know about it, then definitely tell us by commenting below.

Hope friends, you must have liked this article of ours and you must have got a lot of information from it. If you want more information about insurance, then you must tell us by commenting below.

Friends, if you have any question, then definitely tell by commenting below, we will be happy to help you. Along with this, share this article of ours with your friends on social media.

What is Whole Life Insurance Plan – Benefits, Eligibility