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Are Whole life insurance plans right for you?
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Posted On :
Jan-16-2012
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Article Word Count :
548
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The awareness of life’s uncertainty has led to the growing popularity of various insurance policies in India. Out of all the insurance policies, life insurance sector is forever booming.
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The awareness of life’s uncertainty has led to the growing popularity of various insurance policies in India. Out of all the insurance policies, life insurance sector is forever booming. Life insurance provides consumers with the relief that the financial requirements of the family will be taken care of in their absence, this has captured a very emotional and practical aspect of the common man’s life and hence is always in demand. There are two kinds of life insurance policies in the market, whole life insurance policy and term insurance policy. They both serve the similar purpose but differ in many aspects, majorly in the cover duration provided by each. In this article we will focus on how a whole life insurance policy can benefit you.
As the name suggests, whole life insurance policy provides cover for a full life time and not just for a specified period of time like term insurance. The policy has no fixed date of maturation and the cover ceases after the death of the insured. The policy only provides death benefit to the beneficiary after the death of the individual. Since the maturation of the policy happens after the death of the insured the policy holder does not get the money in his/her lifetime, this means there is no survival benefit.
Though whole life insurance and term life insurance plans serve the similar purpose of covering the life of the insured, the two are quite different. A term policy is crafted to merely offer you a basic life cover. On the other hand a whole life insurance policy provides a life cover and an option to save. As whole life insurance invests the additional payment the premium payable is higher as compared to a term life insurance. The additional money invested is returned in the form of bonuses that is not provided in a term life insurance plan. Also this sort of an insurance can serve as a collateral in case you need to take a loan as the policy includes savings element, this is not possible in case of a term policy. A term policy provides cover for a specific period of time, so you can assume to gain the entire amount when you’re around 70-75 years. A whole life insurance expires when you reach 100 years of age. A term insurance policy is great if you have other investments in place and just require an insurance cover.
With changing times, the whole life insurance policy has been innovated with a few added benefits. Typically this plan does not offer survivor benefit, however you can make withdrawals or even take loan against the cash value of the policy. The cash value of the policy stands for the profit or bonus you earn on the premium paid. The policy even provides survival benefits to the policy holder in case he/she lives up to the age of 80 years. When the policy matures the insured is liable to get the sum assured plus the bonus for the term of the policy. Also some companies give you the choice to select the premium paying terms.
A whole life insurance policy brings many benefits and serves its purpose of being a financial support after the death of the insured.
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Article Source :
http://www.articleseen.com/Article_Are Whole life insurance plans right for you?_134475.aspx
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Author Resource :
The author is an experienced writer with keen interest in insurance sector. Whole life plan is cover that in real sense of term provides cover for the entire life of the insured. Whole life insurance policy provides excellent survivor and death benefits.
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Keywords :
whole life insurance policy, whole life insurance, whole life plans, whole life policy, whole life insurance plan, whole life,
Category :
Finance
:
Insurance
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