Whole Life Insurance Plans

What is Whole Life Insurance Plan?

Life is unpredictable and uncertain in nature, which is why you need to get the life cover for your family to ensure that your family is not left stranded after the mishap. Whole Life Insurance Plan is a Life Insurance Plan that typically covers the policyholder for his/her entire lifetime, provided the policy is in force. The premium amount throughout the policy tenure remains fixed.

The Whole life insurance plan is a combination of insurance and investment component. It is a basic life insurance policy covering you for any uncertainties throughout your life span.

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Why should I Buy Whole Life Plan?

Following are the top reasons to buy a whole life insurance.

Attaining Financial Security

No one knows what will happen tomorrow, but in order to ensure the financial independence of your family in your absence, it is quite essential to buy a whole life insurance to secure all important life events in your lifetime.

Alternative for Financial Obligations

You have several financial obligations such as children’s education, marriage, loans, etc. In case of a mishap, a life insurance policy helps your family fulfill all these financial obligations with ease.

Peace of Mind

Any amount of money cannot be a substitute for a person. But, by buying a whole life insurance you can provide protection for your loved ones when you are not there.

Takes Care of Emergencies

In case you develop a critical illness or are disabled due to an accident, such incidents may result in loss of income and may lead to financial crunch. A life insurance policy can provide your family the financial assistance, when your earnings are disrupted.

Affordable Cover for Entire Life

By buying whole life plan, you can avail benefit to get the cover for the lifetime. If bought at an early stage, you need to pay the premium charges, so it is affordable to keep the policy active throughout the life span.

What kinds of Whole Life Plan, can I opt from?

Typically, there are two types of whole life insurance plans.

1. Participating Whole Life Plan

Under this life insurance policy, the insurance company shares its profits with the policyholder. The actuaries of the company make the estimates of the investment returns and profits are then shared accordingly. The proportion of profits shared with the policyholder usually varies and it is announced annually by the insurance company. The accumulated bonus or returns are paid on death or maturity, whichever event occurs earlier.

2. Non-Participating Whole Life Plan

Under this life insurance policy, the benefits are fixed and remains same throughout the entire policy period. Such policies do not participate in the profits of the insurance company. The benefits are paid as lump sum amount which remains constant throughout the policy period.

What are the Benefits of Buying a Whole Life Plan?

Following are the key benefits of Whole Life Insurance Plan:

Death Benefit

A whole life insurance policy offers a death benefit to the insured’s family/assigned nominee and thus ensures them the financial protection under the plan benefits. The death payout is a Sum Assured plus accumulated benefits depending on your whole life insurance plan.

Maturity Benefit

A whole life insurance plan also offers you the maturity benefit as specified under the terms of the policy. Usually, the policy expires on life insured attains 100 years of age. Under such life insurance plan, the accumulated cash value is paid as the maturity amount in case of survival of the insured throughout the policy term.

Rider Benefit

There are several riders that you can attach to your whole life insurance policy to expand the coverage. Riders are optional and help in enhancing the protection which is usually not included under a basic life plan.

Surrender Benefit

In case of urgent financial requirements, you also have the option to surrender the policy and you may exercise this option to get quick access to the accumulated cash surrender value.

Loan Benefit

If you are in some urgent requirement of funds, you can take a loan against the accumulated cash value in a whole life plan.

Tax Benefit

You can avail tax benefits under section 80 C for the premium paid towards running the whole life policy for yourself, spouse or kids. The payouts of the insurance policy are tax free under section 10 (10) D of the Income Tax Act, 1961.

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How is my Whole Life Plan Premium Calculated?

Following are the key factors that help determine the premium amount for the whole life insurance plan:


Your present age determines the premium amount for the life policy. If you are buying the plan at a younger age say at an age of 25 years, you are charged with lower premiums. If you are buying at a later age say at an age of 45 years, the insurer charges the higher premiums for providing the same life cover as the risk in life aggravated with the advancement of age.

Life Cover

The higher life cover attracts, the higher premium to cover the risk. Although, some insurers offer some attractive discounts on choosing the high life cover,proportionately you need to pay the higher premiums for a higher life cover.

Smoking or Drinking

Bad habits such as smoking cigarettes and consumption of alcohol have an adverse effect on the premium amount. As these are injurious to health, insurers will charge higher premiums to cover the risk.

Prevalent Health Condition

Your present health condition also plays a key role in determining the premium amount for the whole life insurance policy. In case, you are suffering from illnesses such as blood pressure, diabetes, or other diseases, your insurer will charge the higher premiums. Your previous health conditions also make an impact on the premium amount. The history of any critical or potential health issues also needs you to pay the higher premiums.


As per statistical analysis, females tend to have higher life expectancy than males. Taking into consideration the mortality risk, insurers charge higher premiums to provide life cover for the male life based on life expectancy model.


The nature of occupation also determines the premium amount for your whole life policy. A risky occupation like working in the mining industry, coal mines, serving in the armed forces, etc. involves the risk of life. Insurers will charge you with the higher premiums basis high intensity of the risk involved in your occupation.

What are Some Smart Buyings Tips?

Following are some key tips you may refer before buying a whole life policy:

Assess Life Cover

It is quite essential to buy a right amount of life cover after assessing your financial obligations which may include child’s education, marriage, loans or other forms of debts. Buy a life cover that can help your family or dependents to maintain their lifestyle and fulfill the set financial goals even after your untimely demise.

Consider Inflation Factor

Prior buying a cover, don’t forget to consider inflation in mind. A cover of say Rs 50 Lakhs may not be of enough value somewhere 30 years later. It is thus essential to buy a life cover that can easily take care of the financial needs of your family when you are not there.

Invest Early

The premium amount for a life plan primarily depends on the entry age, so it would be a wise move to buy a whole life policy in an early stage of life. When buying it at a younger age, your insurer will offer you a whole life policy at lower premiums. Whole life plans have a longer tenure, buying a policy early is a prudent decision.

Choose Appropriate Add-ons

Add-on covers for sure helps enhance coverage to your policy. It is imperative to choose the add-ons that seem appropriate for covering the life risk. These additional covers are available at an extra cost, so choose wisely.

Choose Insurer Wisely

Whole life insurance contracts are long term contracts, it is therefore imperative to ensure that you are choosing the right insurer that can help in catering the financial needs of your family, especially in your absence. You should check the claims settlement ratio of the insurer and assess whether the insurer is responsive to your queries. It all helps in tough times while settling claims.

Buy Online

When looking to buy a whole life policy, it is recommended to first compare the plans from different insurers online. There are several portals like ours where you can compare and buy the right plan at discounted rates. It would be a win-win deal.

Read Policy Terms

Prior to buying the policy, it is quite essential to go thoroughly through the policy terms & conditions, its benefits, and inclusions & exclusions. It helps you assess the plan and you can then easily make a right decision to buy.

Is there any Add-on Cover/Rider with Whole Life Plan?

Following are the rider options to attach with your whole life policy:

Accidental Death Benefit Rider

This rider provides extra financial benefits to your nominee in case of your death due to an accident. Under this rider, an accidental death sum assured is paid to your nominee, which is additional to the base sum assured of the policy.

Term Rider

Under this rider, an additional death benefit is paid to your nominee additional to the base policy sum assured in case of any form of death. The assigned nominee can then receive the sum assured as specified under this rider.

Critical Illness Rider

This rider takes care of the medical costs involved due to severe illnesses such as a Major organ transplant, Coronary artery bypass, Heart attack, Cancer which may disable an individual temporarily or permanently that result in loss of earnings.

Waiver of Premium Rider

Under this rider, the future premiums for the whole life plan is waived off in the case of death or disability of the policy holder. The policy remains active till the end of the policy period.

Income Benefit Rider

In a whole life insurance, the policy benefits are provided to the nominee as a one-time lump sum amount, but by choosing this rider, the nominee can exercise the option to receive benefits in installments as a guaranteed income. It helps them take care of day to day expenses in the absence of the insured.

Disability Rider

This rider replaces your income for the specified tenure in case of permanent or temporary total or partial disability arising due to an accident or sickness. The payout may differ depending on the type of disability occurred.

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What is Not included in my Whole Life Plan?

Your whole life insurance plan has the following exclusions.

Suicide clause

This clause states that if the insured commits suicide within the first year of the commencement of the policy, the insurer is not liable to pay the policy proceeds.

Aviation Clause

This exclusion states that if the life insured dies as a passenger in a private plane, the insurer will not entertain the claim. The policy benefits are paid out only in when the life insured is died in a commercial plane crash while travelling.

Dangerous Adventure Sports

This exclusion says that if the death of the insured occurs due to the involvement in dangerous adventure activities such as river rafting, para-gliding, skiing, rock climbing, etc, policy benefits will not be paid.

Act of war exclusion

This exclusion provides that the insurer will not pay, if the death is occurred as a result of the war.