Whole-of-life policies offer a payout to your loved ones, irrespective of when you die. The lumpsum amount and the payment requirements depend on your policy terms and conditions.

Why Whole Life Insurance?

Here as some reasons why a Whole Life Insurance is a good investment:

  1. It provides protection that lasts a lifetime.
  2. It guarantees a death benefit for your beneficiaries.
  3. You have the flexibility of choosing your preferred method of premium payments.
  4. It isn’t term based and doesn’t expire unless you cancel your policy.

Working Scheme

When you apply for a whole of life insurance you are asked to select the amount of payout you desire. The rate of your monthly premium is calculated based on your selected payout amount and other personal information (like your age, health conditions, etc).

The policy will pay out the lump sum to your family when you die provided you continue paying your monthly premiums.

Types of Whole Life Insurance

If you thought that having a guaranteed payout when you die was the only advantage of Whole Life Insurance, you’ll be glad to know that there are three different policy types you can choose from depending on your suitability:

  1. Non-Profit Whole of Life Insurance

This type of Life Insurance requires you to pay the insurer the fixed sum of premium until you die, after which the fixed amount of death benefit is paid by the insurance company to your loved ones.

  1. With-profit Whole of Life Insurance

This type of Life Insurance does not promise a fixed sum upon your death to your loved ones but rather requires you to pay a set amount of monthly installment which is invested by the insurance company in support of you. The amount received by your family when you pass depends on the results of your investments.

  1. Unit-linked whole of life insurance

In this type of Insurance, the payout remains constant, however, your premium rates may fluctuate depending on the stock market as the premiums in this case too is invested in the market.

The suitability of the type of whole of life insurance depends on the amount of risk you are willing to take and your affordability. It is advised you read all policy-related documents carefully.

Is it right for you?

Somewhere, it depends on the current financial status as you need to figure out if you are capable of paying the premiums for as long as you live. It also depends on the stage of your life as you can understand better the current financial and emotional status you are in. In case of any confusion, feel free to consult experts regarding the options that are available for you. There might be variations in the premium according to the circumstances and you may be able to find the policy that fits your specific needs. Get in touch with our insurance experts to know more!

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