Whole Life Insurance Plans - An Overview

What Is A Whole Life Policy?

Whole Life plan is also called as straight life, ordinary life. It remains throughout the insured whole lifetime provided the premiums are paid. A certain aforementioned amount is paid to the nominee in the event the insured dies. The policyholder at any time withdraw the policy or borrow against it. The maturity age for this policy is 100 years. If the insured lives past the maturity age, the policy will become matured endowment. The death benefit under this plan is tax free.

How Does it Work?

are very different from other types of life insurance plans. Understanding how they work can also help you decide whether they are fit for you or not. A whole life plan can be purchased against a payment which can be made as a one-off sum, on a monthly or a yearly basis. If you have purchased a unit-linked whole life policy, then your funds will be directed not only towards the purchase of your life insurance for payment of the sum assured amount and the remainder of the amount will be invested in an investment fund. In case of unit-linked/flexible whole life policies , the insurer will regularly review the policy to compare whether the value of the policy is equivalent with the cost of the life assurance which it is providing. In case the investment fund, where the remainder of the money is invested, is not performing to help cover the cost of benefits, your insurer may suggest you to either reduce the amount of your sum assured or to increase your regular contribution. Additionally, certain whole life policies also give customers the option of obtaining cover against specific illnesses or disability.

Types of Whole Life Policy:

There are different types of Whole Life Insurance Policies available in the market, each of which is designed to cater to specific requirements. Read about each of these to find out more about which one may suit your needs.

  1. Non-Participating Whole Life Insurance:

    A non-participating whole life policy has a level premium and face amount during your entire

    life. The advantages of such a policy are its fixed costs and relatively low out-of-pocket premium payments. Since the policy is non-participating it does not pay you any dividends.

  2. Participating Whole Life Insurance:

    The defining feature of a participating whole life policy is that it pays dividends. Payment of dividends essentially indicates that the excess earnings which the company has accumulated via investments, savings from expenses and favorable mortality of the organization. There is no guarantee that policy holders will receive dividends. However, if dividends are paid, they will be paid in the form of cash which will be utilized to bring down the premium payment amount or will be allowed to accumulate and will attract interest at a specified rate. The dividends can also be used to for purchasing paid-up additional insurance to enhance the face amount of coverage provided.

    Under these two broad categories of participating and non-participating, there are several types of whole life policies which individuals can choose from:

    1. Level Premium Whole Life Insurance:

      As the name suggests, level premium whole life insurance features level premium payments which must be paid till the insured is alive. The premiums collected in the early stages of this policy are sufficient to pay for the insurance protection costs. The surplus funds, inclusive of the interest earnings will contribute towards any shortfalls in premiums at a later stage when the annual premium payments may not be enough to cover the insurance costs.

    2. Limited Payment Whole Life Insurance:

      Under the Limited Payment Whole Life Insurance, policyholders will be required to pay premiums for a limited period of time but will receive lifetime protection. However, since the premiums are to be paid for a shorter period of time, the premium amount will be relatively higher than the premium amount payable for an ordinary whole life plan. under this kind of plan, customers have to pay premiums for a specified number of years – 10 years, 20 years, etc.

    3. Single Premium Whole Life Insurance:

      Under the single premium whole life insurance policy, individuals have to make the premium payment in a single lump sum. The payment must be made at the issue of the policy, making the policy fully paid up, with no requirements of any further premium payments. The single lump sum premium payment will provide the policy with loan value and immediate cash value, both of which could be significant in amount, depending on the amount of the lump sum premium. Given the sizeable amount of the lump sum premium payment, the Single Premium Whole Life policy is considered more as an investment insurance product.

    4. Indeterminate Premium Whole Life Insurance:

      The special feature of an Indeterminate premium whole life policy, which is otherwise similar to an ordinary whole life insurance policy, is that is allows policyholders the option of adjusting their premiums. Based on its estimate of its current earnings, cost of expense and mortality, the insurer will charge policyholders a "current" premium. In case there are any changes in the aforementioned estimates, the insurer will adjust the premium amount accordingly which the policyholder will then be charged.

Who Should Opt For Whole Life Insurance?

is a suitable form of protection for a number of individuals. You can opt for whole life insurance if:

  • You have made investments towards your post-retirement requirements and are seeking for other opportunities to invest in.
  • You own an estate and wish to plan and bequeath your estate and savings to your beneficiaries and transfer your wealth.
  • You are a young professional who has started off with their career and will be able to make premium payments for a considerable time going into the future.

Benefits of Whole Life Policy:

  1. Cover For Life

    The insured will get cover for his entire life unlike other life insurance plans that is fixed for a certain period. The other life insurance plans will expire and it will be expensive to take another one when you really want one. In the event you die, a lump sum tax free amount is paid to the nominee. If you outlive the term, you will not receive any return. For example if a 25 year old takes a whole life plan at the age of 25 years, he will receive a lump sum payment at the age of 45, the age at which his 20 year premium payment term will expire. He can use this money for his retirement and also his cover will continue till he turns 100 or till the date he dies.

  2. Assurance Of Coverage, Periodic Payments And Tax Benefits

    The survival benefits will be built over time which keeps increasing over time. You will get lifetime coverage along with guaranteed level premiums for a limited premium payment term. The premium is constant throughout the premium payment term. Sum assured is guaranteed and the bonuses are declared based on the performance. Some companies offer survival benefit from the end of the premium payment term till the policy matures. Tax benefits are also available to the insured under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

  3. Serves As A Source Of Cash

    Financial experts believe that a person must keep 6-8 month’s living expenses in the form of liquid asset. It is however difficult to reserve such a huge cash while meeting retirement and long term saving goals. But with a whole life plan, you can get the cash at the end of the premium payment term.

  4. Loan Option Available On Your Whole Life Plan Policy

    The surrender value of the policy increases over time and you can borrow against the policy’s surrender value at any time. This is a better alternative against borrowing against home or retirement accounts.

  5. Your Dependents Will Benefit From This Plan

    The return will prove to be an additional financial source in the family. This plan is ideal for estate planning individuals who want to pass on their estate to their legal heir as it helps create wealth.

Eligibility Criteria for Whole Life Policy:

The eligibility criteria i.e. minimum/maximum entry age, premium payment term, etc., will differ from one insurer to the other. To get the details about the eligibility criteria for your chosen policy, you are advised to contact your insurer directly who can guide you better.

Whole Life Policy Riders:

Most insurance policies are accompanied by certain riders which help enhance the protection provided by the policy. Some of the commonly available riders with whole life insurance policies are critical illness rider, accelerated sum assured rider, hospital cash rider, partial/permanent disability rider, premium waiver rider, accidental death & dismemberment rider, among others. For the riders available with your policy, please contact your insurance provider.

Popular Whole Life Policies Available:

There are multiple leading insurers in India who offer competent and customizable whole-life policies at affordable rates. Some of the most popular choices available are listed below.

  1. ICICI Pru Whole Life

    • Survival benefit- Sum assured and bonuses are payable during the premium payment term.
    • Life cover benefit- In the event you die, your dependent will het twice the sum assured along with the bonus that was collected during the premium payment term.
    • Whole life cover- Additional sum assured is payable in the event the insured dies after completion of the premium payment term or at maturity that is when he turns 100 years of age.
    • Regular bonus is declared at the end of the financial year.
    • Rider to Enhance coverage – this plan comes with several riders which can be taken to enhance the coverage provided by the plan. The rider available are Accident and Disability Benefit Rider, Critical Illness Rider and Income Benefit Rider.
    • Tax benefits can be availed as per the prevailing Income Tax Laws.
  2. Max Life Whole Life Super

    • Guaranteed lifetime protection.
    • Flexible premium payment terms.
    • Flexible bonus option.
    • Paid up additions withdrawal.
    • Riders are available.
    • Terminal illness benefit.
    • Maturity benefit is paid when the policy matures.
    • Death benefit is payable to the dependent.
  3. IDBI Federal Lifesurance Whole Life Savings Insurance Plan

    • This is a non-linked participating whole life savings plan.
    • 2 lump sum pay-outs are paid one is at the end of the premium payment term and the other is when the policy matures.
    • Family is secured for 100 years.
    • Guaranteed additions and bonuses are available to boost your savings.
    • Accidental death benefit can be opted during the premium payment term.
  4. SBI Life Shubh Nivesh

    • Maturity benefit is offered based on the plan option you have chosen.
    • Death benefit is available on endowment option and on endowment with whole life option.
    • Deferred maturity payment option is available.
    • Three riders are available. They are Preferred Term Rider, Accidental Death Benefit Rider and Accidental Total and Permanent Disability Benefit Rider.
    • Tax benefits are available as per the Income Tax Laws.
  5. LIC Whole Life Policy

    • Death benefit where the nominee will get sum assured plus the accrued bonus.
    • Maturity benefit after 40 years from the date of commencement of the policy provided the insured has turned 80 years.
    • Income Tax benefit is available provided all the premiums have been paid.

Whole Life Policy FAQs

  1. How is Whole life insurance as an investment?

    A. While whole life insurance mostly serves the purpose of providing protection, the Single Premium Whole Life Insurance policy is a particular kind of policy which offers the dual purpose of not only providing insurance cover but also acts as an investment.

  2. Can I borrow against my Whole Life Insurance policy?

    A. A whole life insurance policy not only provides cash value but also has no date of expiry, which enables the policy holder to easily borrow against their such a policy. For more details regarding borrowing against your whole life insurance policy, you can contact your insurer who can guide you better.

  3. What is Death Benefit in a Whole Life Insurance Policy?

    A. Death benefit is the annuity or pension which is paid to a beneficiary after the passing away of the life insured. The same concept is followed in whole life insurance policies where the beneficiary gets the amount of the life insurance policy as lump sum or through regular payments following the insured’s death.

  4. Is Whole Life insurance an option for senior citizens?

    A. Yes, whole life insurance is a viable option for senior citizens as this policy provides comprehensive cover and does not have any age limit attached under eligibility. Following the death of the insured, the beneficiary named in the policy will receive the payout / death benefit. Whole life insurance policies offer a number of useful benefits like tax exemptions, growth of cash value, permanent protection, uniform premium payments, cash access via loans and other withdrawal options.

  5. Are early withdrawals allowed under whole life insurance policies?

    A. Withdrawals from cash value may not be allowed under whole life insurance policies. However, you an check with your insurer for withdrawal provision under such a policy.

  6. Are whole life insurance policies suitable to supplement post-retirement income?

    A. Yes, whole life insurance policies are quite suitable to supplement one’s post-retirement income. The cash value of the policy can provide post-retirement income.


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Whole Life Insurance Plans Reviews

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  • SBI Life Life Insurance
    "Policy is Good"
    0.5 4.5/5 "Excellent!"
    15 years back, i bought the life insurance policy from SBI LIFE. Actually my salary account is lying with SBI and they have approached me hence i bought the policy from them. I have paid the premium amount of Rs. 35000 which is a one time payment. This is a 13 years term policy. Sum assured amount is Rs. 1 lakhs.
    Was this review helpful? 0
    , kolkata
    Reviewed on Sep 12, 2019
  • LIC
    LIC Life Insurance
    "Suitable policy for every family"
    0.5 5.0/5 "Blown Away!"
    Purchased my life insurance policy from LIC. One of friend engaged with insurance business since he approached me, i bought the policy from him. This is a tax benefits policy. I am paying the premium amount of Rs. 4000 every month. In the year of 1996, i have bought the plan and i make the premium through online.
    Was this review helpful? 0
    , kolkata
    Reviewed on Sep 12, 2019
  • LIC Life Insurance
    "Excellent"
    0.5 5.0/5 "Blown Away!"
    I have taken a life insurance in LIC on 5 years before. The policy is for 20 years. I am paying premium in the half yearly package. While getting a policy my agent has given an information about the policy details. I use to do payment through an online.
    Was this review helpful? 0
    , mumbai
    Reviewed on Sep 10, 2019
  • LIC Life Insurance
    "Best Service"
    0.5 2.0/5 "Expected more"
    I have taken LIC policy directly through the agent .The name of this policy was Bhartiya Jeevan Bhima policy .This policy premium os paid on montly mode.I am paying te premium amount of Rs.615.The agent gave all the required information about the policy details very clearly .I am paying the premium through online as well as agent .
    Was this review helpful? 0
    , jaipur
    Reviewed on Sep 10, 2019
  • Kotak Life Life Insurance
    "Moderate"
    0.5 3.5/5 "Pretty good"
    I have a life insurance with Kotak General and it was referred by a friend. I don't have customer service experience and never compared the benefits. I have paid almost Rs.3500 for a quarter. The policy coverage is 10 years and the benefits are okay.
    Was this review helpful? 0
    , bangalore
    Reviewed on Sep 10, 2019
  • ICICI Prudential Life Insurance
    "Very Good Policy"
    0.5 5.0/5 "Blown Away!"
    My company has provided me a life insurance policy from ICICI Prudential. Its a life insurance policy which gives for the customer who takes the loan. This policy has a coverage value of Rs. 10 lakhs. I'm paying the premium amount of Rs. 5000 and i have chosen the annual payment mode.
    Was this review helpful? 0
    , coimbatore
    Reviewed on Sep 10, 2019
  • LIC Life Insurance
    "Excellent"
    0.5 5.0/5 "Blown Away!"
    I have taken a life insurance in LIC on 13 years. The policy is for 20 years and it is jeevan anadha. I am paying premium in the yearly package for the amount of 5 thousands. While getting a policy my agent has given an information about the policy details.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Sep 09, 2019
  • LIC Life Insurance
    "Good for child future"
    0.5 4.0/5 "Great!"
    Before 3 years I took Jeevan Suraksha plan in LIC for my daughter, quarterly I used to pay Rs.2500 it has term of 10 years. Then I get sum assured, bonus interest and they do have life coverage for certain demise. Generally I make the payment through the executive.
    Was this review helpful? 1
    , coimbatore
    Reviewed on Sep 09, 2019
  • LIC Life Insurance
    "Good Life cover policy"
    0.5 5.0/5 "Blown Away!"
    The policy is nice from LIC. I have chosen LIC because some of my colleague is working as a LIC agent hence i purchased the policy from him. I'm paying the premium amount of Rs. 10000 for each quarter. Its for 10 years term policy. I'm satisfied with the sum assured amount and this is tax benefits policy.
    Was this review helpful? 0
    , new delhi
    Reviewed on Sep 08, 2019
  • Bajaj Allianz Life Life Insurance
    "Excellent Policy"
    0.5 4.0/5 "Great!"
    Purchased the life insurance policy from Bajaj Finserv when i got the Bajaj card, they have given the policy 4 months ago. I have been paying the premium amount of Rs. 1300 and the sum assured amount is Rs. 20 lakhs and i make the premium through online.
    Was this review helpful? 1
    , thane
    Reviewed on Sep 08, 2019
  • LIC Life Insurance
    "Need to drecrease premium amount"
    0.5 5.0/5 "Blown Away!"
    I have taken a life insurance in LIC on 10 years. The policy is for more than 15 years and name for the policy is jeevan anadha. I am paying premium in the quarterly package and amount which was paying higher of 3 thousands. While getting a policy my agent has given an information about the policy details.
    Was this review helpful? 0
    , chennai
    Reviewed on Sep 07, 2019
  • LIC Life Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
    Claims are better in LIC. Earlier i had a money back policy and its money savings and tax benefits policy. I have chosen the monthly payment mode. When my policy got over but from ECS my money is automatically deducted to LIC account, they themselvves resolves this issue even though i have not given any request to stop the payment.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Sep 07, 2019
  • LIC Life Insurance
    "Fine Policy"
    0.5 4.0/5 "Great!"
    I have bought a life insurance from Life Insurance Corporation of India. LIC is having a better products. Generally i wont use the customer care and directly i used to visit the branch and the peoples are good. My premium payment has been deducted through ECS. The people are genuine. I'm satisfied with the sum assured amount provided by them. Once the policy is getting matured, directly they will credited the money back to my account.
    Was this review helpful? 1
    , hyderabad
    Reviewed on Sep 07, 2019
  • LIC Life Insurance
    "Benefits needs to increased for long term"
    0.5 3.0/5 "Satisfactory"
    I pay Rs. 10,000 each per annum for three policies, my parents started from my childhood. LIC is not a right choice to invest the money for long terms but they are providing financial security for the certain demise. The customer care needs lots of improvement interms of professional service.
    Was this review helpful? 0
    , navi mumbai
    Reviewed on Sep 06, 2019
  • LIC Life Insurance
    "Good Service"
    0.5 5.0/5 "Blown Away!"
    I have taken Life Insurance policy through LIC agent .This policy is very useful .I have got all the required details about the policy through the agent .This policy tenure is for 15years .This policy is still active and i am paying the premium through online and branch .There was no difficulties faced so far .
    Was this review helpful? 0
    , gurgaon
    Reviewed on Sep 06, 2019
  • LIC Life Insurance
    "Need to improve their servcie"
    0.5 3.0/5 "Satisfactory"
    I have taken a life insurance in LIC on 10 years before. The policy is for 20 years. I am paying premium in the quarterly package. Before agent given all the details but now days there is no proper update from their end and not sending remainder messages to send so that once I missed to pay so they had charged for 1000 rupees.
    Was this review helpful? 0
    , bangalore
    Reviewed on Sep 05, 2019
  • LIC Life Insurance
    "Good Service"
    0.5 5.0/5 "Blown Away!"
    I have taken Life Insurance policy through LIC agent .This policy name is Barathi Jeevan Bhima .I have got all the required details about the policy through the agent .This policy tenureis for 20 years .Thispolicy is still active and i am paying the premium through online and branch .
    Was this review helpful? 0
    , gurgaon
    Reviewed on Sep 05, 2019
  • LIC Life Insurance
    "Good Service"
    0.5 5.0/5 "Blown Away!"
    I have taken Life Insurance policy through LIC agent .The policy name is Jeevan Anand and the tenure is for 18 years.I am paying the premium on half yearly basis .I am paying the premium through online and sometime through agent .While submitting the documents the process was smooth .
    Was this review helpful? 0
    , chennai
    Reviewed on Sep 05, 2019
  • LIC Life Insurance
    "Not upto the mark"
    0.5 3.0/5 "Satisfactory"
    Recently 2 to 3 policies matured with LIC and am paying premium for one more policy, I think its called JEEVAN ANAND because taken long back. I am not satisfied with the benefits and the sum assured is not upto the mark. The payment mode is auto debit.
    Was this review helpful? 0
    , vizianagaram
    Reviewed on Sep 05, 2019
  • LIC Life Insurance
    "Recommendable Plan"
    0.5 5.0/5 "Blown Away!"
    I have money back plan with LIC, I activated in 2007 but it get over at 2040. I need to pay monthly premium around Rs. 1027+ gst, there is a waiting period of 20 years then I get the sum assured, they are providing life coverage for the certain demise as well. The agents are helpful interms of resolving the queries.
    Was this review helpful? 0
    , chennai
    Reviewed on Sep 05, 2019
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