Whole life insurance is a traditional insurance that provides coverage to the insured person for his entire life.
Whole life insurance provides permanent death benefit coverage for the life of the policyholder. Like any other insurance, the sum assured is fixed when the policy is purchased. As long as the insured person pays the premium, the policy provides life coverage. This insurance has a maturity period of up to 100 years. If the insured person dies before that age, the beneficiary receives the fixed sum assured and if the insured person lives beyond 100 years, the insurance company pays the matured endowment coverage to the insured.
Here Is The Code = IN05
Whole Life Insurance and Term Insurance People often compare whole life insurance with term insurance but this becomes tricky as they are comparing two completely different products. Whole life insurance is comparatively more expensive than term insurance as it offers insured death benefit and combines the investment aspect with cash value which is not present in term insurance.
A term insurance policy provides coverage for a specific period (years), thus getting its name ‘term’ whereas in whole life insurance the coverage is lifelong up to 100 years.
Types of Whole Life Insurance Whole life insurance is a life insurance that covers the entire life of the insured person up to 100 years. There are different types of whole life insurance available in India. Some of them are listed below.
Non-Participating Whole Life Insurance
Non-Participating Whole Life Insurance offers the facility of a face amount and a level premium. It is a low-cost insurance policy that does not pay any dividends or bonuses.
Participating Whole Life Insurance
In this type of whole life insurance, the premiums paid by the insured or policyholder are further invested by the insurance company. The revenue amount earned through these investments is distributed to all policyholders as bonus. The bonus when declared becomes a part of the amount payable and is received by the policyholder as per certain declared terms and conditions, such as the bonus amount can be paid by a lump sum deposit, can be used as a cash payment or can be used to counteract the premiums to be paid by the insured, etc.
Level Premium Whole Life Insurance
In level premium whole life insurance, the premium remains constant throughout the policy term and is paid regularly by the policyholder as long as the insured is alive.