As the name implies, a whole life insurance policy is a type of life insurance plan that covers the insurer for his entire life. Besides providing financial security to the policyholder’s family, it can also be used as an investment tool.  

Additional Reading: What Is The Benefit Of Life Insurance

Let’s check out the top benefits of whole life insurance plans in India:

  • Whole Life Coverage - Unlike term plans that offer life coverage only for a specific period, whole life policies offer life coverage for the entire life of the insured, generally around 99 to 100 years. 

  • Death Benefit - In the unexpected demise of the policyholder during the policy term, the nominee(s) receives a bulk sum as death benefit. The death benefit is the total sum assured by the policy.

  • Maturity Benefits and Periodic Payouts - Whole life policies offer maturity benefits that are provided at the time of policy maturity. The policyholder can opt to avail these benefits as a lump sum amount or choose to receive the benefits as regular income at periodic intervals. 

  • Fixed Premium - The premium amount remains unchanged for the entire tenure of the plan. For instance, if you’re paying Rs. 2500 per month now, you will continue to pay the same amount for the entire tenure, irrespective of market fluctuations, inflation, etc. 

  • Tax Benefits - The premium paid for a whole life plan is tax-exempted under Section 80C of the ITA. Similarly, the payouts received on maturity of the plan are also tax-free under Section 10(10D) of the ITA. 

  • Loan Facility - Once the policyholder has completed premium payment for three years, he can avail loans using whole life plans as collateral. 

  • A Tax-free Legacy for your Heirs - This is the biggest benefit of a whole life plan. It helps you leave behind a legacy for your children, grandchildren at the time of your death. Tax-free death benefits are the cherry on top.  

Knowing the benefits of whole life insurance policies can help you make a smart choice. Make sure to go through the features and policy terms, to choose the right plan that best fits your needs.