Whole Life Insurance

What is a Whole Life Insurance Plan?

Whole life insurance is a type of insurance plan that offers financial security to the family of the policyholder in the event of the policyholder’s unfortunate demise. It aims to provide whole life cover to the assured and create a financial cushion for future generations.

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

Simply put whole life plans provide life cover for the entire life and help build a corpus. It is a good investment option to include in your investment portfolio.

Best Whole Life Insurance Policies in India 2023

Here is a list of best 4 whole life insurance plans in India 2023:

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

1. Tata AIA Sampoorna Raksha Supreme

   • The plan offers 4 death benefit options and you can choose the most suitable option as per your preference

   • The plan’s life stage benefit option allows you to increase the life cover at important milestones like marriage and childbirth

   • You can also increase your sum assured using top-ups

   • On diagnosis of a terminal illness the plan pays 50% of the base sum assured 

   • You can choose for the death benefit to be paid in a lump sum or regular income paid over 5 years 

2. ICICI Prudential iProtect Smart

   • You can choose to pay the premiums all at once, for limited premiums, or regular policy term

   • Select the payout to be made in a lump sum, monthly income for 10 years, or a combination of both

   • The plan offers accidental death benefits or accelerated critical illness benefits as additional riders

   • You can get comprehensive coverage against death, terminal illness, and disability 

   • Get tax benefits as per the prevailing tax laws u/s 80C and 10(10D)

3. Canara HSBC Young Term Plan

   • The plan offers two options: Level and Increasing term plans

   • The plan offers various add-on riders that you can add to the base plan at nominal premiums

   • With the plan’s special exit benefit, you can exit the plan early and receive all the premiums paid until that point

   • You can choose for the death benefit to be paid in a lump sum, monthly income, or a combination of both

   • The plan offers a block your premium benefit through which you can fix your premiums at policy inception and increase the sum assured in the next 5 years

4. Edelweiss Tokio Life Zindagi Protect

   • You can choose from the Life cover option or the Return of Premium options

   • The plan provides a 6% discount on the first-year premiums if the medical test is completed within 7 days of policy initiation

   • You can skip premium payments upto 8 times depending on your premium payment term, with the plan’s Premium Break benefit

   • The plan offers the Child Future Protect Benefit, through which you can increase your life cover till your child turns 25 years old

   • You can cover your spouse within the same plan with the Better Half Benefit

*All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C Apply

How Does Whole Life Insurance Work?

Let us understand with an example:

Suppose you are a 30-year-old individual looking to secure your family against an eventuality for your whole life. You can buy a whole-life policy (till 99 years of age) for as low as Rs. 2,168 payable monthly. This way in case of your death during the policy term, your nominees will receive the death benefit amount to take care of their financial needs like paying off any remaining debts or loans or funding the child’s higher education or wedding.

Features and Benefits of Whole Life Policy

Let us see the various features and benefits of whole life insurance that you should know before buying the best whole life insurance plan in India.

• Whole Life Coverage
  These plans provide coverage against death for the policyholder’s whole life i.e., till 99 or 100 years of age. This guaranteed life cover (sum assured) is paid to the nominee of the policy in case of the policyholder’s death, during the policy term.

• Death Benefit
  In the event of the unfortunate demise of the life assured 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/nominee of the policy by the insurance company, provided all the premiums are duly paid. This benefit amount will be paid along with the accrued bonuses (if applicable).

• Fixed Premium
  The premium rate of a whole life insurance plan is fixed and does not increase or decrease throughout the term period of the policy. So, if the policyholder has to pay a premium of Rs. 2,168 per month for a specific policy, he/she will continue to pay the same premium regularly for the entire premium payment term.

• Protection for Life
  Whole life insurance is designed to provide life protection to the family of the assured during the policy term. It is done in the form of payment of a guaranteed sum assured along with bonuses if any in the case of the policyholder’s unfortunate demise.

• Tax Benefits
  The life assured can avail of tax exemption as per the prevailing tax laws under section 80C on the premium paid towards the whole life insurance policy. Moreover, the maturity claims are also tax exempted under section 10(10D) of ITA 1961.

• Offers Loan Facility
  As whole life insurance provides protection up to 100 years of age, the policyholder can opt for a loan facility against the plan in times of emergency. However, the loan can only be availed if the policy has completed 3 policy years if all the premiums of the policy are duly paid.

Further, the policy of the spouse will work as a financial backup for the children and the grandchildren after the demise of the policyholder. Thus, whole life insurance is a great insurance solution for wealth creation and future planning, so that one can provide financial security and a good lifestyle to their family.

Types of Whole Life Insurance Plans

A whole life policy provides protection to the life assured 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 assured. 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 it receive any bonus facility.

• Participating Whole Life Insurance
  In contrast 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 assured is invested by the company; the profit earned through the investment is paid as a bonus at the end of the policy term.

• Pure 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.

• Limited Payment Whole Life Insurance
  In this plan option, the policyholder has to pay the premium for a limited term like for 10 or 20 years, and have the policy continue its cover for the whole policy tenure. Due to the premiums being paid for a limited tenure, the premium rates for this plan are slightly higher than the pure whole life premium rate.

• Single Premium Whole Life Insurance
  Under this plan option, the entire premium of the policy is paid in one go at the time of policy purchase. Since the premium is paid all at once, no other premium payments have to be made throughout the policy tenure.

Difference between Term Insurance and Whole Life Insurance

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

However, the main reason behind opting for an insurance plan is wealth creation and financial security for family members. Let us take a brief understanding of the difference between a whole life insurance policy and term insurance policy.

Whole Life Insurance Riders

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

• Waiver of Premium Rider:
  Within this rider, if the policyholder is diagnosed with a critical illness or is permanently disabled due to an accident, 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:
  Under this rider, the insurer will pay the additional rider sum assured to the nominee in case of the policyholder’s accidental death during the policy term. This payout can help the family take care of their monthly expenses and other financial obligations.

• Accidental Total Permanent Disability Rider:
  In case of total or permanent disability caused due to an accident, this rider will provide the rider sum assured to the policyholder. This payout can be used to pay any of the medical costs required for the suitable treatment of the disability.

• Critical Illness Rider:
  On the diagnosis of a critical illlness during the policy term, this rider can help take care of the medical expenses that might incur due to any critical illness that is included in the plan, including life-threatening illnesses like an organ transplant, any severe heart ailment, etc. These diseases could lead to a temporary or even a permanent loss of regular income, and the rider sum assured can help take care of these expenses in a time of financial crisis.

• HospiCare Benefit Rider:
  Under this rider, if the policyholder is hospitalized in the general or the ICU ward, a fixed percentage of the basic sum assured is paid to help the policyholder take care of the medical bills and treatment costs.

• Terminal Illness Benefit
  With this rider, the insurer will payout the entire or a part of the sum assured in case the policyholder is diagnosed with a terminal illness during the policy term. In case the rider pays a part of the sum assured at terminal illness, the remaining part will be paid to the nominee at the policyholder’s unfortunate demise.

Who Should Opt for Whole Life Insurance Policy?

Whole life insurance is a type of life insurance that offers policy coverage for a longer term than a regular term plan and secures the nominee in the event of the policyholder’s unfortunate absence. Every salaried individual should plan to provide financial security to their loved ones and family.

• Individuals who want to create a financial cushion for their future generations.

• Individuals who want to secure their family financially and want to create a corpus in the long run.

• Individuals who want to accumulate wealth for retirement should consider buying this life insurance policy.

• Individuals who want to save on their yearly taxes.

Factors to Consider when Selecting Whole Life Insurance Plan

Here is a list of factors you should consider while selecting the best whole life policy for yourself:

• Adequate Life Cover: You should always assess your life cover by taking your family’s requirements into account. Since this amount will be paid to your family in the event of your unfortunate death, the life cover should be enough to cover your family’s financial obligations. The payout can be used by your family to fund your child’s higher education or future wedding or can be used to secure your spouse's life post-retirement.

• Potential Inflation: Since whole life insurance provides policy cover for the whole life, you should take the rising costs and inflation into account while selecting a life cover amount for your family. For example, a cover of Rs. 1 Crore might be enough to cover your family’s needs today, but the amount might lose its value in the next 40 years.

• Early Investment: The premium rate for whole life insurance depends on the age of the policyholder at the time of policy purchase. Since the premium rates are low for young individuals, therefore you should always try buying a whole life policy as early as possible to secure a large life cover for your family at low premiums.

• Select Suitable Add-ons: You should always go through the list of available add-on benefits in the whole life insurance plan. You can include these riders in the base plan to enhance its coverage. 

• Choose the Right Insurer: The Indian regulatory body, IRDAI releases its annual report mentioning the CSR of each insurer for every financial year. CSR is the ratio of the number of claims received to the number of claims settled by a company in a financial year. You should compare the CSR values of insurance companies online and go with an insurer with a high CSR value. This ensures that your family’s claim will be settled in your absence.

• Read the Policy Documents: You should always go through the policy documents to understand the details, inclusions, and exclusions of the whole life policy. This avoids any future confusion during claim settlements.

FAQ's