OneInsure Blog
Post By Joan
Is Whole Life Insurance A Good Investment?
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Life Insurance, insurance and investment
Yes, whole life insurance is a good investment option for anybody looking to secure the financial future of their loved ones. Whole life policies, a type of life insurance product, remain active for the entire lifetime of the insured individual. In the event of the demise of the policyholder, the sum assured is paid by the insurance company to the nominee along with the accumulated bonuses in case of a non ULIP plan.
Reasons that make whole life insurance a good investment option:
Reason 1: You get lifetime protection
We never know when the unthinkable can happen. Whole life insurance, as the name suggests, is in force for the entire lifetime of the insured individual. If you ensure premiums are paid on time, you will be covered throughout the course of your life. While whole life plans cost more than other types of life insurance products, they come with the most benefits. You get lifetime protection and cash value accumulation.
Reason 2: Legacy planning
Legacy planning is the financial plan to give away ones assets to a loved one or a family member post ones death. A whole life policy can contribute significantly in this plan as the policy is typically active for a person till age 99, hence at whatever age the person dies (before 99), the policy benefits are paid out to the nominee as a parting gift from the insured member.
Reason 3: Build up cash value
Did you know that whole life policies have a cash value component? Cash value is the amount or monetary value of the policy issued or given to the policyholder at the time of cancellation/surrendering the policy. As you make premium payments on a whole life policy, a portion of the payment goes toward your policy’s cash value. In case of ULIP plans, you can make partial or full withdrawal from the accumulated funds, while traditional plans allows you to get a loan (up to a limit) against the cash value of your policy.
Reason 4: Tax benefits under Section 80C and 10(10D)
Under Section 80C of the Income Tax Act, 1961, tax deductions can be claimed up to ₹ 1,50,000 on premiums paid for life insurance policy. The amount received under a life policy is exempt from tax under Section 10(10D) of the Income Tax Act. Here, the sum assured plus any bonus paid on maturity or on the death of the policyholder will be tax free for the receiver.
Conclusion
As you can see from above, investing in whole life policies is good for a number of different reasons. Along with life-long protection, you get to avail tax benefits, build a cash value and make it a part of your legacy planning.
OneInsure offers a host of Whole Life plans that can fit your needs.
To compare and select life insurance policies, click here or get in touch with us on 86559 86559.
