Insurance policies are mainly of two variants, term insurance and whole life insurance.
Term insurance provides life cover to the insured for a specific tenure; in case the insured survives the tenure, no payment is made.
In contrast, whole life insurance policy provides life cover till the insured expires or till s/he is 100 years old, whichever is earlier.
Pros of Whole life policy –
• Premium payable is stable throughout the tenure
• Pays as well as protects
• Enables you to create an inheritance for your loved ones
• Add-on and riders are available to customize coverage
• Premium paid for life insurance qualifies under section 80C for tax exemption
• Helps meet financial needs by providing loan against the maturity value
• Enables you to surrender the policy prematurely, the maturity value as on that day is paid after some minor deductions
• Most insurers allow you to continue availing policy benefits even after discontinuing premium payment till the policy is surrendered
• Whole life policy comes with a dividend payment option Cons of whole life policy –
• Premiums are generally high
• Greater chances of being under insured
• Not the best investment option available in the market
• Most investors are cautious of bundled options like whole life insurance mixing insurance with investment
• Majority of investors are wary of availing a life cover post retirement when their beneficiaries no longer dependent on them
Whole life policies are beneficial for young individuals as they can benefit from affordable premiums; as well as potential policy owners seeking security of guaranteed returns, in case of death and survival both.
Disclaimer - *Conditions apply. This product is offered under the Group Insurance scheme wherein Bajaj Finance Limited is the Master policyholder. The insurance coverage is provided by our partner Insurance Company. Bajaj Finance Limited does not underwrite the risk. IRDAI Corporate Agency Registration Number CA0101. The above mentioned benefits and premium amount are subject to various factors such as age of insured, lifestyle habits, health, etc (if applicable). BFL does NOT hold any responsibility for the issuance, quality, serviceability, maintenance and any claims post sale. This product provides insurance coverage. Purchase of this product is purely voluntary in nature. BFL does not compel any of its customers to mandatorily purchase any third party products.”
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