So, you know that it is important to buy a life insurance plan but don’t know what type you must get? There are several types of life insurance policies such as whole life insurance, term insurance, Unit-Linked Insurance Plans, and more. Each of them has its own unique benefits, and in this article, we will look at why whole life insurance could be the right option for you.
1. Insures you for your whole life
A whole life insurance policy is designed with the purpose of offering your coverage for as long as you live. Compared to all other types of life insurance policies, whole life insurance has the benefit of certainty of coverage. Other policies, such as term insurance, only offer coverage for a fixed period, say 30 years. If the policyholder passes away post that policy term of 30 years, they are not covered. However, in whole life insurance, coverage is usually offered up to the age of 100. This helps ensure that whenever it is that the policyholder passes away, they have the benefit of life insurance.
2. Offers survival and maturity benefits
Unlike other types of insurance policies such as term insurance, whole life insurance plans have a survival or maturity benefit. This means that if you survive the policy term, you will receive the sum assured. This helps you recover the premium paid as well as receive a lumpsum amount of money that can help you and your family meet a range of financial goals.
3. Pay premium only for a limited period
While your whole life insurance policy cover will last you till you are 100, you have the option of paying the premium only for a limited period. This is helpful because if you choose to pay your premium for a limited term of say 7, 10, or 15 years, then during your retirement you do not have to worry about bearing this cost but can still continue enjoying the benefits. This way, the flexibility of premium payment terms allows you to plan financially for your golden years.
4. Choose from multiple coverage options
When you decide to opt for a whole life insurance policy, you can choose from several coverage options to best meet your needs. You can choose from a range of riders such as critical illness, accidental death benefit, and more. This helps you to make your insurance coverage even more comprehensive and expand the range of coverage.
5. Enjoy tax benefits
In addition to the benefit of insurance coverage, you can also claim certain tax benefits when you buy a whole life insurance policy. The premium that you pay for your life insurance policy is eligible for a tax deduction of up to Rs 1.5 lakh per financial year under section 80C of the Income Tax Act, 1961. This essentially means that you can deduct the premium amount from your taxable income, thereby reducing your tax liability. However, it’s important to note that this benefit is offered only under the old tax regime. Hence, make sure to speak with your financial advisor to know what tax regime you are currently following and which tax benefits you can accordingly claim.
Whole life insurance plans are convenient in several aspects. Whether that is life-long coverage or limited-term premium payments, this type of life insurance policy is one that helps you have the coverage you need for as long as you need it. You can check out the premium for a whole life insurance policy by using an online life insurance premium calculator. Not only does this tool help you get a premium quote, but it also allows you to customise your insurance policy, add riders, and more, along with letting you see what all of it would cost you. Another thing to remember about all the types of insurance policies out there is that you don’t always have to pick between two different types of life insurance policies. You can pick two types of policies and enjoy both their benefits.
