LEARN MORE
WHY WHOLE LIFE INSURANCE?
You work really hard to provide for your family so they live comfortable lives, but have you ever considered what would occur to your family after you? The thought of not being able to assure your family a well-protected future can be terrifying. What will happen in your absence? How will your family manage their finances? No one can help your family recover emotionally, but financial assistance can be planned in a certain way beforehand.
A whole life policy is a permanent policy that offers life-long protection to the insured person. The insured selects how they would like to pay premiums - it could be one single premium at the policy inception and enjoy protection for the rest of your life, or you can choose to stop payment at a particular age (say at age 60 or 65) or pay throughout your life.
The death benefit pays out a lump sum to your dependents and in effect does income replacement if death happens in the short term. On the other hand, if you live a long life, this policy acts as an inheritance tool.
The critical illness benefit helps you and your family offset the financial strain of critical illness in the event that you are diagnosed with a critical illness defined in the policy. This is an optional living benefit but a very critical one to have in your whole life cover.
Accidental death or disability benefit provides you an option to double the cover. This is another living benefit. It pays out should the policyholder become permanently disabled or pass away from an accident. If the latter happens, the accidental death benefit is paid out in addition to the main sum assured
WHAT YOU NEED TO KNOW
What is the Purpose of Whole Life Insurance?
A whole life insurance policy has the objective of securing the future of the family of a policyholder. It provides coverage for the whole life, which means in the event of the policyholder's death, the nominee or a legal heir will get the sum assured to maintain their lifestyle and cope with the regular expenses.
What Factors Affect the Cost of Whole Life Insurance?
The cost of a life insurance depends on numerous factors such as the policyholder's age, health, gender, and lifestyle habits, as well as the death benefit amount and the type of policy.
What Are the Key Features of Whole Life Policy?
1. Life-long coverage. Death benefit remains guaranteed, even in your absence, as long as the premiums are fully paid. 2. Tax benefits. Cash value accumulated is tax-deferred and can be used for financial and retirement planning. The sum assured payable to the nominees is also tax-free. 3. Fixed or level premium costs. Constant premium rates and sum assured are guaranteed throughout the policy term. 4. Financial backup. Partial, tax-free, withdrawals and policy loans are available against the cash value of the policy.
How Long is it Worth Keeping a Whole Life Policy?
Whole life insurance was created for people who want a lifetime of protection and tax-advantaged benefits. As long as your needs haven’t changed and you can still afford the premiums, there are plenty of good reasons to keep your whole life policy as long as possible: 1. Guaranteed death benefit - Since the death benefit on a whole life policy is 100% guaranteed, keeping your policy until you die is a nearly foolproof - and, in most cases, tax-free—way to leave money to your loved ones 2. Lifelong coverage - A universal life insurance policy provides coverage for your entire lifetime as long as premiums are paid 3. The death benefit paid to the beneficiary is tax-free, meaning your loved ones won't have to pay income taxes on the received sum
Is Whole Life Insurance a Worthwhile Investment?
Any insurance policy can be a worthwhile investment if it is securing the future financial needs of your family. However, the financial requirement totally depends on the current financial situation and future plans. It could be a good financial decision to protect your family with less risk than market- linked instruments.
How Does Whole Life Insurance Differ from Term Life Insurance ?
Whole life insurance provides lifelong coverage and includes a cash value component, while term life insurance provides coverage for a specific period and does not accumulate cash value. In the case of term life insurance, there would be no benefit if you survived the policy.
What Exclusions Are There in The Policy?
1. Suicide, attempted suicide or any self-inflicted injury whether the life assured is sane or insane at the time and if it occurs within two years from the commencement of the policy 2. Any act committed by the policyholder, the life assured, or beneficiaries that constitute a violation of criminal law 3. Abuse of alcohol, wilful inhalation of gas, self-inflicted injury, wilful exposure to radioactivity, or the wilful consumption of poison or overdose of drugs (whether the drugs have been prescribed by a medical practitioner or not) 4. Any act of war (whether war be declared or not), military action, terrorist activities, riots, strikes, civil commotion, or insurrection in all cases as an active participant. 5. Active participation in mountaineering, horse riding, hunting, motor racing, power-boat racing, or fighting (except in self-defence) 6. Participation in any form of aviation other than a scheduled air service over an established passenger route. 6. Any medical condition not disclosed prior to the issuance of the policy, for which treatment was received or recommended by a medical practitioner or of which the life assured was aware of prior to the date of declaration of the policy. 7. Critical illness claims arising from conditions not listed in the policy.
What Claim Documentation is Required?
You will be required to provide the following documentation for a death claim to be paid under the policy - the policy should be active and all premium payments made before the claim, a copy of the policy schedule of benefits, original death certificate, police abstract report for accidental death and postmortem report where applicable. For critical illness claims and total and permanent disability claims, a medical report to show the illness or disability is required, a duly completed claim form and identification documents like ID or Passport