Whole Life Insurance Benefits
- What is Whole Life Insurance?
- What are the benefits of Whole Life Insurance?
- For whom whole life insurance is suitable?
People often get confused when looking for an insurance policy as there are several insurance plans and policies available in the market. Choosing the right policy is important as individuals spend a portion of their income to pay premiums regularly.
A whole life insurance policy comes with various benefits such as death benefits, tax benefits, the facility to avail loan against the surrender value of the policy, etc. But the question arises whether it is right for you or not. Let's see how a whole life insurance policy is beneficial.
Whole life insurance policies are a kind of term insurance policy that provides you protection for the whole life i.e. 99 years. In case of the policyholder's demise, death benefits are provided to their beneficiaries which are tax-free. The advantages of a whole life insurance policy also include a facility to take a loan against the policy. The loan amount can be equivalent to the surrender value of the policy.
Let's understand the benefits of a whole life policy in detail.
Whole Life Insurance offers a range of benefits to the policyholder. Let's understand these benefits in detail:
Whole Life Insurance provides an individual with coverage for their entire life. In the event of the unfortunate demise of a policyholder, death benefits are paid to their beneficiaries. There may be people in your family who are financially dependent on you. Having a whole life insurance provides them financial coverage even in your absence.
The premium paid by the policyholder for their whole life policy is exempted (up to Rs 1.5 lakh) from tax under Section 80 C of the Income Tax Act, 1961. Moreover, the amount paid to the beneficiaries on the policyholder's demise is tax-free under Section 10 (10D) of the Income Tax Act 1961.
A person having whole life insurance can avail loan facility against their policy. The loan facility is available if two years have passed since the policy was purchased. Moreover, all the premiums up to the date should be paid. A person can need money to fulfill their financial needs such as medical needs, education, marriage, etc. This benefit varies as per the terms and conditions of the policy.
The premium of whole life insurance is the same for a particular tenure. In this tenure, there will be no change in premium (neither increase nor decrease). The uniformity in premiums helps the policyholder to plan their investment and expenses accordingly. Buying a whole-life policy at a young age is recommended as the premium charged is comparatively less.
Whole Life Insurance helps policyholders to build a reliable source of retirement income. At retirement age, people generally depend on their children for basic needs. However, a source of income at retirement can provide them with the necessary support.
Whole life insurance can be suitable for you:
With a whole life policy, one can secure the future of their loved ones financially. Buying a whole life insurance at a young age is usually recommended as the premium is low. It also gives policyholders a sense of security and peace. Whole life insurance offers many benefits including whole life coverage, wealth accumulation, loan against policy, tax benefits, etc. Before buying a whole life policy one can compare various policies or consult their financial advisor who can help them to make the right decision. A right policy provides an individual with peace of mind knowing that their loved ones are secure.
The maximum age to buy whole life insurance ranges between 60 to 65 years. However, an individual can avail of the policy benefits till 99 years of age.
Buying whole life insurance at a young age is recommended as the premium charged is usually low.
Yes, an individual can avail of tax benefits on the premium paid under Section 80 C of the Income Tax Act, 1961. Moreover, the death benefits paid to the beneficiary are tax-free under Section 10 (10D).
If a policyholder outlives their whole life policy no benefits are paid to the policyholder.
Whole life policy has various advantages including whole-life coverage, tax-free death benefits, loans against the policy, etc.
The coverage amount an individual chooses should be based on various factors such as human life value, financial requirements, outstanding liabilities or loans, etc.
Compare and buy the most suitable Life Insurance Plan from the below-mentioned IRDAI-approved Life Insurance companies.
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