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Whole Life Insurance

Whole life insurance plan are a type of life insurance policy which provides insurance coverage to the policyholder for the entire life i.e. up to 100 years of age, provided the policyholder pays the premiums of the policy on time. It offers guaranteed death benefit to the beneficiary of the policy in the event of unfortunate demise of the policyholder during the tenure of the policy. The insurance holder can decide the sum assured amount at the time of policy purchase.

Under whole life insurance in India, if the policyholder survives up to 100 years of age, then matured endowment coverage is provided to the policyholder as maturity benefit.

This policy covers as long as you live. As it offers risk cover for the entire life, it is also called permanent life insurance policy. It offers dual benefit of life cover and bonus. The premium is paid for the first 10-15 years and the insurance cover is extended till the entire life of the policyholder. For instance, if you are 30 years old and you opt for the whole life plan whose sum assured is Rs 30 lakh, then you would stop paying premium when you are 45 years of age but the death benefit coverage would last for your complete life. The premium is paid only for a limited duration and therefore, it is high.

How Does Whole Life Insurance Works?

Whole life insurance is a specifically designed life insurance plan which aims to provide whole life cover to the insured so that they can live a financially secured life and create a financial cushion for the future, in case of accidental death.

These life insurance plans provide death benefit along with maturity and survival benefit to the policyholder. According to the one’s own requirement and suitability, the policyholder can choose from different types of whole life insurance offered by the life insurance companies.     

Every year, insured pays a premium. Out of this, a portion is used for providing protection and the remaining stays invested in the company. If a profit is earned, policyholder is entitled to get the bonus on the invested amount. The investment grows in value and is returned to the policyholder if he chooses to withdraw or lives till the maturity of the plan.

To sum up, whole life plans give life cover for the entire life and help build a corpus. It is good to include this option in your investment portfolio.

Features of Whole Life Policy

The policy provides insurance coverage to the policyholder for the complete life. Upon death of a policyholder, insurance payout is made to the nominee. It comes loaded with following features:

  • Death Benefit

    In the event of the uncertain demise of the insurance holder during the tenure of the policy, the death benefit is paid to the nominee. The death benefit is paid as a total sum assured amount to the beneficiary of the policy by the insurance company, provided all the premiums of the policy are dully paid.

  • Guaranteed Premium

    The premium interest rate of this life insurance policy is set for the entire tenure of the policy and does not increase or decrease throughout the term period of the policy. So, if the policyholder pays a premium of Rs.2500 per month, then he/she will continue to pay the same premium for the whole tenure of the policy.

  • Protection for Life

    Whole life insurance is specifically designed to provide life protection to the family of the insured in the form of payment of guaranteed sum assured along with bonuses if any in the of policyholder’s demise.

  • Tax Benefit

    The premium paid towards the policy and maturity proceeds is tax exempted under section 80C and 10(10D) of Income Tax Act 1961.

  • Loan Facility

    After the completion of 3 years of policy, the insurance holder can avail loan against the policy.

Benefits of Whole Life Insurance Policy

  • Whole Life Coverage

    It provides death benefit cover to the policyholder until 100 years of age. It provides protection to the policyholder until death. 

  • Guaranteed Life Coverage

    It provides the financial security of the family and the loved ones even in the absence of the breadwinner of the family.

  • Periodic Payments

    At the time of policy maturity, the policyholder receives the lump-sum amount as maturity benefit along with the bonuses, if any. Moreover, some of the life insurance policies also offer maturity benefit in form of regular income. Thus, at the time of maturity of the policy, the insured can choose the avail the maturity benefit as a lump-sum amount at one go or as regular income at specific intervals of time.

  • Tax Benefits

    The insured can avail tax exemption under section 80C on the premium paid towards the life insurance policy. Moreover, the maturity claims are also tax exempted under section 10(10D) of ITA 1961.

  • Serves as a Source of Cash

    According to the experts it is suggested that the individuals should save funds for future so that they can deal with the eventualities of life. However, creating a large corpus at a small span of time is not an easy task, with the help of whole life insurance plan in India one can secure their future financially and can achieve their long-term economic goals of life. 

  • Offers Loan Facility

    As whole life insurance provides protection up to 100 years of age, the policyholder can opt for loan facility against the plan. However, loan can only be availed if the insured completes 3 policy years and if all the premiums of the policy are dully paid.

  • Benefits the Dependents of the Plan

    Whole life insurance plan is a great option of investment in order to provide economic security to the family. For example, if an individual opt a whole-life plan then both the spouse will get an extra financial protection that can be used at the time of retirement as retirement fund. In case, of decease of one of the partner, the policy will provide death benefit to the beneficiary of the policy. 

    Further, the policy of the spouse will works as a financial backup for the children after the demise of the insured person. Thus, whole-life insurance is a great option of insurance cover in terms of wealth creation and future planning, so that one can provide financial security and good lifestyle to their family.

Types of Whole Life Insurance Plans

A whole life insurance policy is a type of life insurance plan that protects the insured against death, whenever it may happen. It means that there is no fixed term under whole life insurance. Most policies provide a dividend to the policyholder which helps with retirement. These life policies provide insurance until the death of the insured person. Whole life policies are classified into.

  • Non-Participating Whole Life Insurance

    This is a low-cost life insurance plan which offers the feature of face amount and level premium. As a non-participating policy, the plan does not pay any dividend and nor does receive any bonus facility.

  • Participating Whole Life Insurance

    On contrary to the non-participating whole life insurance plan, participating life insurance policy offers the benefit of bonuses. Under this plan, the premium paid by the insured is invested by the company; the profit earned through the investment is paid as bonuses to the insured.

  • Pure Whole Life Insurance

    Under this plan option, the premiums are paid continuously throughout the life of the insured until death. Risk benefit is for the entire duration of life and the sum assured is paid after the death of the insured.

  • Limited Payment Whole Life Insurance

    Under this plan option, the policyholders are required to pay the premium of the policy regularly for the entire tenure of the plan. The premium of the policy remains constant for the whole tenure of the plan.

     Where the insured pays a fixed number of premiums for a specific number of years or till he/she reaches a specific age. Risk cover is however throughout the life of the insured.

  • Single Premium Whole Life Insurance

    Under this plan option, the entire premium of the policy is paid at one go. Under this plan option, a large sum assured amount is paid as a guaranteed payment to the beneficiary of the policy.

Best Whole Life Insurance Policies in India

Plans

Entry Age (Minimum to Maximum)

Maturity Age

Policy Term

Sum Assured

Aegon Life Guaranteed Income Advantage Insurance Plan

20-55 years

85 years

85-entry age

Minimum- Rs. 1,00,000

Maximum- No Limit

HDFC Life Sampoorn Samridhi Plus

30-60 years

75 years

15-40 years

Minimum-Rs.65,463 Maximum- No Upper Limit

IDBI Federal  whole Life Insurance

18-55 years

100 years

100 years

Minimum- Depending upon the age at entry and PPT

Maximum- No Limit

IndiaFirst CSC SubhLabh Plan

18-55 years

65 years

10 or 15 years

Depending upon the age of the insured

Kotak Premier Life Plan

3- For 8-year PPT-55 years For 12-year PPT-53 years For 15-year PPT-50 years For 20-year PPT- 45 years

99 years

99 years less entry age

Minimum (On Maturity)- Rs. 2,00,000

Max Life Whole Life Super

18 - 50 years

100 years

Up to 100 years of age.

Minimum-Rs.50,000 Maximum- No Upper Limit

PNB MetLife Whole Life Wealth Plan

30 days-65 years

99 years

99 years minus age at entry

Multiples of the sum assured cover:

When age at entry is under 45 years- 0.5*(70-age at entry), subject to at least 10

When the age at entry is over 45 years- 0.25* (70-age at entry), subject to at least 7

Pramerica Sahaj Suraksha

18-50 years

75 years

15 and 20 years

Minimum- Rs. 1,00,000

Maximum- No Limit

Reliance Life Long Savings

15-30 years

70 years

15-30 years

 Minimum- Rs. 80,000 Maximum- No Limit

SBI Life Subh Nivesh

18- 60 years

65 years

15 years ( Extended life cover up to 100 years)

Minimum-Rs.75,000 (x1000/-)Maximum- No upper limit

Star Union Da-ichi’s Jeevan Ashray

8-50 years

70 years

15-25 years

Minimum- Rs. 2,00,000

Maximum- Rs. 50,00,000

TATA AIA Life Insurance Fortune Maxima

30 days-60 years

100 years

100 minus issue age

Single Pay- 1.25 times the Single Premium

Limited Pay- Higher of 10*AP or 0.5*Policy Term*AP

Disclaimer: “Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.”

  • Aegon Life Guaranteed Income Advantage Insurance Plan

    This plan ensures that one has a comfortable life even after retirement. At the end of the policy term, the insured obtains guaranteed yearly payouts. The plan also offers additional rider benefit options and one can make the most of it depending upon the requirements.

  • HDFC Life Sampoorn Samridhi Plus

    This plan provides an option to the policyholder to choose between endowment and endowment whole-life insurance policy. As a limited premium payment endowment policy, the plan provides the option to extend the life cover up to 100 years of age. Along with the benefit of life cover the policy also offers the facility to save on taxes.

  • IDBI Federal Whole Life Insurance

    This is a whole life policy, which provides term life coverage to the insurance holder up to 100 years of age. Under this plan option, a lump sum amount is paid to the insurance holder as maturity benefit at the end of the policy tenure. Along with the benefit of life protection, the plan also offers bonuses as guaranteed additional bonus or reversionary bonus, if any.

  • IndiaFirst CSC SubhLabh Plan

    A plan, which makes it sure that even with smaller savings and low premium one can easily grow the investment and shield the future of the family. Through the facility of partial withdraw one can easily have access to the fund after the completion of five years. Buying this plan ensures that every bit of it is worth it.

  • Kotak Premier Life Plan

    This plan will let the insured enjoy the comforts and that too at the convenience. Moreover, it will bring in the sense of the responsibility herein help the one to secure the future of self and family. This plan will shield life until the 99th A whole life plan with limited premium payment wherein one chooses to obtain bonus payout once the premium payment period expires. These payouts will help to fulfill the planned objectives and commitments and enjoy the golden period of life.

  • Max Life Whole Life Super

    This is a participating whole life insurance plan, which provides whole life cover to the policyholder up to 100 years of age.  The plan also offers bonus facility to the insured. With higher insurance coverage, this plan is best suitable for individuals who want to secure the financial future of the family and loved ones.

  • PNB MetLife Whole Life Wealth Plan

    A plan that ensures that wealth is created even during critical illness. A whole life cover even up to years of age and that allows one to save without any interruption. It enables one to manage the financial portfolio and likewise is rewarded with some fun boosters. Achieve the economic objective with tailor-made solutions just a few clicks away and give shape to the future of the family.

  • Pramerica Sahaj Suraksha

    This plan helps one to keep the finances in order so that one need not worry about the same in case of any emergency specifically during the golden period of the life, child education or even marriage, and so forth. Investing in this plan will be the wisest choice as it will let one create a financial cushion and create an enormous corpus for the coming times that will help the family even if the insured passes away.

  • Reliance Life Long Savings

    A plan that inculcates the habit savings in one’s lifetime and offers a comprehensive life cover and creating a legacy for the family. This plan enables one to achieve the milestones that have been long planned for such as buying a house, the future of the child, an international family trip, and so much more. Well, achieving these milestones involves good financial planning. This plan can be tailored to the premise of the needs ensuring that the family receives the benefits and the future is likewise protected in case of any unforeseen event.

  • SBI Life Shubh Nivesh

    This is a non-linked with profit endowment assurance plan that offers full life cover to the insurance holder. The plan allows the policyholder to save regularly to create a financial cushion for the future. The plan also provides maturity benefit along with bonuses, if any if the insured survives the entire tenure of the policy.

  • Star Union Da-ichi’s Jeevan Ashray

    This plan will let one plan today for a bright future. In case of any uncertainty, the small savings will allow one to shape the future and grant peace of mind and less of financial stress so that a family gets a secure future for the prospective times. A plan that will help one to save and protect simultaneously besides providing comprehensive financial security from the peril of any untimely demise.

  • TATA AIA Life Insurance Fortune Maxima

    This plan ensures the financial safety of the loved ones and is one non-participating unit-linked policy that will on fulfil every need with much effectiveness. This plan will enable to maximize corpus alongside the market-driven development. Investing in this plan is beneficial and helps one to achieve long-term objectives such as retirement planning, child education, and so forth. This plan will help one to secure the dream over a lifetime

Difference between Term Insurance and Whole Life Insurance

Whether to buy a term insurance plan or whole life insurance is a personal decision and should be done on the premise of the requirements and financial objectives.

However, the prime aspect of choosing a life insurance plan has to be the life cover necessities, which stems from any manner of economic planning. Let us take a brief understanding of the difference between a whole life insurance policy and term insurance policy.

Whole Life Insurance Policy

Term Insurance Policy

It has the dual benefit of both savings and protection

It is a pure life insurance policy,  which has no additional benefits apart from the death benefit

The tenure within this is flexible and applies to the policyholder when reaching 100 years of age. When the policyholder turns 100 years the benefits will be paid

The tenure offered within this is fixed and the benefits are likewise applicable

The premiums are invested in the protection fund and different investment options. So when a profit is made by the policyholder upon these a bonus is declared

Term insurance has no such feature

Through the premiums, a cash value is built that can be used to obtain loans and that too at low-interest rates. While the base loan sum is deducted from the sum assured, the interest is collected and kept with the insurance company, which does not affect the insurance premium

Term insurance has no such benefit

In comparison to term insurance premium whole life insurance policy premium is more

It can be availed by paying the low-premium amount

The premium is fixed throughout the policy period

It employs a dynamic premium specifically when during the term insurance policy renewal

It offers premium payout wherein the policyholder survives the policy period

No refund of premium until a claim made against the demise of the policyholder wherein a sum assured will be paid

Now, depending upon the preferences, one can choose the life insurance plan accordingly.

Whole Life Insurance Riders

Today most of the insurance companies in India offer different rider benefit options that help to make the whole life insurance policy more enhanced, which are optional.

Listed below are some of the rider options available within the policy:

  • Premium Waiver Rider:

    Within this rider, if the policyholder passes away or has a disability the future whole life insurance premiums will be waived off and the policy will remain active until the policy term ends.

  • Accidental Death Benefit Rider:

    This rider offers additional economic advantages to the nominee when the policyholder passes away untimely. The nominee will receive an accidental death sum assured that is extra to the base sum assured of the plan.

  • Partial/ Permanent Disability Rider:

    In case of partial or permanent disability that can be caused due to any sickness or accident having this rider benefit will provide you with the income for a certain time-frame. The payout will vary on the premise of the disability that occurs.

  • Critical Illness Rider:

    This rider will be helpful and will take care of the medical expenses that might incur due to any critical illness that include an organ transplant, any severe heart ailment, etc. These diseases could lead to a temporary or even a permanent loss of regular income.

  • Income Benefit Rider:

    Within a whole life insurance plan, the benefits are provided to the beneficiary as one-time lump sum amount; however, when opted this rider, the beneficiary can easily receive the benefits as one guaranteed income through installments. This helps to take care of the everyday expenses when the policyholder is not around.

    The rider benefit options might vary from one insurer to the other. Therefore, in case of any clarifications get in touch with the insurance company.

Who Should Opt for Whole Life Insurance Policy?

Whole life insurance policy is an appropriate form of a life insurance plan for most of the individuals. Every salaried individual should plan to provide financial security to their loved ones and family.

  • Individuals who want to create a financial cushion for the future.
  • This plan is a great option of investment for individuals who want to gain a return on investment along with the benefit of term life coverage.
  • The individuals who want to accumulate wealth for retirement should consider buying this life insurance policy.
  • This plan is a good investment option of investment as it provides an opportunity to save on taxes along with the benefit of term cover.

FAQ – Whole Life Insurance

Written By: PolicyBazaar - Updated: 05 August 2020
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