Know the Benefits of Whole Life Insurance Policy

Whole life insurance policy is a type of insurance policy whose tenure lasts for the entire life of the policyholder. Usually, the tenure for a whole life insurance policy is set at 100 years of age. If the policyholder passes away during the tenure of their whole life policy then the nominee is paid the entire death benefit or the assured sum, as chosen by the insured, as a lump sum amount. This is, of course, if the policyholder duly paid their premiums on time.In case the policyholder survives 100 years of age, then the matured endowment coverage is paid to the insured as a maturity benefit.Since such a policy provides life coverage for the entirety of the policyholder's life, it is also called a permanent life insurance policy .

Provides Life Cover for Your Entire Life

Unlike term insurance, a whole life insurance provides coverage for the full duration of the policyholder's life, or until the insured reaches an age of 100 years. So, once you buy a whole life insurance policy , you need not worry about the financial security of your family in case you pass away.

Guaranteed Life Cover

The life cover for the policyholder is guaranteed by the insurer, provided that all premiums are paid on time. This ensures that no matter what, your family will get the assured sum after you pass away. Knowing that your family will have enough financial security in your absence makes this a good choice of insurance.

Periodic Payments

If the policyholder survives the tenure of the whole life insurance plan, that is 100 years, then the maturity amount and bonuses are paid out to them as a lump sum amount. The insured also has the option to receive the maturity amount as periodic payments. After maturity, the policyholder can choose to receive the payment in one go or as a regular income at specific intervals of time.

Tax Benefits

Premiums paid for life insurance are tax-deductible under section 80C of the Income Tax Act. Additionally, the maturity benefit is also exempt from tax according to Section 10(10D) of the Income Tax Act.

Serves as a Source of Cash

Creating a big corpus on your own is not an easy task. A life insurance policy provides a significant corpus that can act as a cash source and be used to fulfill your financial goals like children's education, marriage, or buying property.

Offers Loan Facility

A whole life insurance policy can act as collateral for a loan. In case you require some funds, you can take a loan against your insurance policy. You can do this only if your policy is older than 3 years and all premiums were duly paid.

Benefits the Dependents of the Policy

A whole life insurance policy greatly benefits the dependents of the policy. If you buy a whole life insurance for yourself, you can rest assured that your family will have enough funds to continue living comfortably. A whole life plan will give the necessary jumpstart to your children's future. When you pass away, your spouse can claim the funds and use it for the family's benefit.

Thus, whole life insurance is an excellent choice of insurance if you're looking to secure coverage for your entire life uptoa 100 years. Since the tenure is high, the premiums may also be higher than term insurance plans . So go through the benefits of such a policy and make an informed choice.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.