When it comes to coverage, one size definitely doesn't fit all; thus, life insurance comes in different forms. While a term plan provides extensive coverage at affordable premiums for specific years, a whole life insurance plan does double duty - it pays a death benefit whenever you pass and helps you build savings. This acts like a financial safety net for not just your family if you pass away but also your retirement years.
Life Cover Starting @ just ₹18/day*
Choose India’s Only Personalised Term Plan
Modify coverage as per your life stages & commitments
Hassle-Free Claim Settlement
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Save up to ₹54,600* on your taxes
Lifelong Coverage
Whole life policies protect until age 100
Fixed Premiums
Payments stay the same for the policy's lifetime
Cash Value Growth
Builds guaranteed savings accessible to policyholders
Loan Against Policy
Cash value can be borrowed against for needs
Tax saving
Premiums qualify for tax benefits under Section 80C of the Income Tax Act
Higher Cost
Costs significantly more than Term Life policies
Complexity
Policy structure more complex than term insurance
Limited Flexibility
Your coverage needs may evolve with life's changes
Slow Cash Value Growth
Cash value growth may lag behind other permanent policies
Whole Life Insurance locks in lifelong coverage. It keeps covering you even as a centenarian! So, if you celebrate hitting triple digits, the money you've been growing unlocks as matured endowment funds.
During your lifetime, you also get to watch your "cash value" grow over time. Think of this pool like a savings account inside your policy. You can tap into it anytime as a loan if you need access before age 100. The best part? The amount your beneficiaries ultimately get paid after you pass away is tax-free. So they keep every cent thanks to whole life's special tax benefits.
No wonder it's called permanent protection! Whole life insurance gives you a customisable way to cover your entire life's journey – short or long – while saving up funds just for you. It's like your personal financial bedrock.
Suppose 30-year-old Raj buys a ₹1 crore policy by paying ₹80,000 annually. Over the next 20 years, the cash value might grow to ₹25 lakh. Raj can borrow against this for his daughter's wedding or medical costs.
Later, when Raj sadly passes at age 75, his wife Rita receives the full ₹1 crore tax-free. The cash value growth essentially offsets decades of premiums while leaving a lasting legacy.
This type has level premiums and a fixed death benefit amount for Life. The main advantage is predictable costs, but it does not pay dividends. So, what you see is what you get. Non-participating policies are a good fit if you prioritise predictability and are okay with missing out on potential dividend earnings.
These policies pay dividends from the insurer's excess earnings. Dividends can be taken as cash, used to reduce premiums, or purchase additional insurance. Dividend payouts are not guaranteed - they depend on the insurer's financial performance. Participating policies offer the potential for your money to work harder for you, but they usually come with higher upfront costs. This could be your match if you are okay with a bit of uncertainty for the chance at greater returns.
Features guaranteed level premiums for Life. Early premiums support later years when annual payments are insufficient to cover rising insurance costs. This type of policy is great if you want to budget for the long haul without any surprises. You'll pay more at the start, but you can rest easy knowing your premiums won't suddenly spike when you're on a fixed income in retirement
A limited number of premium payments are required (e.g. 10 years), but coverage continues lifelong. The shorter the payment period, the higher the premiums! This option is perfect for knocking out life insurance payments during your prime earning years. You'll pay more monthly, but you can enjoy your golden years without worrying about ongoing bills.
A single lump sum premium payment upfront funds the policy. This fully pays the policy, and no further payments are required. This type of policy functions more like a hybrid investment insurance product. It's a good choice if you have a significant windfall or nest egg you want to put to work while still securing a death benefit for your loved ones.
Indeterminate premium policies adjust your payments yearly based on the insurer's earnings and expenses. If the company has a good year, your premiums might dip. If times are tough, you may pay more. It's like riding the wave of the insurer's financial performance. These policies offer flexibility and potential savings but require more attention since your payments can change.
While whole life insurance delivers permanent, lifelong coverage, ACKO Life Flexi Term Plan from ACKO Insurance provides a highly flexible and easily affordable term plan that enables you to customise your coverage per your changing needs.
| Basis of Comparison | Whole Life Insurance | ACKO Life Flexi Term Plan |
| Coverage Duration | Lifelong – covers insured for entire life if premiums paid | Customise coverage throughout the policy period. Increase or decrease your tenure as your financial dependents, loans (home, car, education), lifestyle, and income change. |
| Premiums | Remain fixed/level throughout the life of the policy | Lower Premium Rates |
| Cash Value | Policy builds up a cash value that accumulates over time | No cash value or investment component |
| Flexibility | Usually less flexible – modifications require paperwork | More flexible to modify coverage amount |
| Costs | Substantially higher – 4-15x costlier than term insurance | Highly affordable with the flexibility to change the coverage and duration |
| Payout | Lifelong payout guaranteed as long as premiums paid | Only pays if death occurs during a set term period |
| Good For | Estate planning, final expenses, lifelong income protection | Paying off mortgages, child expenses, daily expenses, and more |
| Tax Benefits | Premiums and death benefit payout are tax-free | Premium and payout tax-free |
ACKO Life Flexi Term Plan is an innovative term insurance product that stands out for its unparalleled flexibility and ability to adapt to Life's changing circumstances. Key advantages include:
| Adaptable Sum Assured | Flexible Policy Tenure | Flexible Payout Options |
| Will Creation Service | Affordable Premiums | Easy Claim Process |
When choosing between whole life insurance and ACKO's flexible term plan, consider your timeline, budget, and need for adjustments down the line.
| Situation | Recommended Policy |
| Need lifelong permanent coverage | Whole Life Insurance |
| Limited budget or temporary coverage needs | ACKO Life Flexi Term Plan |
| Prioritise flexibility and customisation | ACKO Life Flexi Term Plan |
| Want to leave an inheritance or legacy | Whole Life Insurance |
| Seeking polished digital-first experience | ACKO Life Flexi Term Plan |
| Desire investment accumulation possibilities | Whole Life Insurance |
| Uncertain about long-range financial needs | ACKO Life Flexi Term Plan |
Purchasing a whole life insurance policy involves:
Determining the appropriate death benefit amount based on income needs and goals.
Researching insurers, calculating projected premium costs at different coverage levels
Completing the policy application and medical/health checks if required
Providing financial documentation verifying income and net worth to satisfy underwriting requirements
Review policy terms like riders, dividends, loan interest rates, and exclusions before signing
Submitting premium payments annually, semi-annually, or monthly, depending on the schedule selected
Riders can enhance whole life insurance coverage. Some of the most popular ones include:
Extra payout in case of accidental death
Waives premium payments if disabled
Provides additional lump sum payout for specific critical diagnoses
Key factors when selecting a whole life insurance policy are:
Look for a reputable insurer with a solid financial rating. A stable company is more likely to be around for the long haul to pay out your benefits.
Compare premium rates from multiple providers to find a policy that fits comfortably within your budget. Don't overextend, but also don't skimp on coverage
Examine illustrations of projected cash value accumulation over time. Look for policies with competitive growth rates and guaranteed minimums.
If considering a participating policy, review the insurer's history of dividend payouts. Consistent, reliable dividends can be a sign of a well-managed company.
Check the policy's loan provisions, including interest rates and repayment terms. Flexible, low-cost loan options can provide easier access to your cash value if needed.
Several key factors can impact the premium you pay for a whole life policy.
The younger you are when you purchase a policy, the lower your premiums will generally be. That's because younger individuals are seen as less risky to insure.
Your overall health and medical history can significantly affect your premiums. Healthier individuals typically qualify for lower rates, while those with pre-existing conditions may pay more or even be denied coverage.
Certain lifestyle choices, such as smoking or participating in high-risk hobbies like skydiving, can lead to higher premiums due to the increased risk they pose.
The higher the death benefit you choose, the more you can expect to pay in premiums. More coverage equals more financial risk for the insurer.
Different types of whole life policies (like participating vs. non-participating or level vs. limited payment) can come with different premium structures. Some may start higher but remain level, while others may be lower initially but increase over time.
Adding optional riders, like critical illness, accidental death benefit, waiver of premium, or long-term care coverage, will generally increase your premium costs.
On average, women tend to live longer than men. As a result, women often qualify for slightly lower life insurance premiums.
Different insurance companies have different underwriting guidelines, which can result in varying premiums for the same coverage amount.
If you have a Whole Life Insurance plan and need to file a claim, here are the steps you should follow in general.
Contact their customer service department or your insurance company. They will provide you with the necessary forms to complete the claim.
You will need to provide documentation to support your claim. This may include a death certificate if you are filing a claim for a death benefit, medical records if you are filing a claim for a critical illness benefit, or proof of disability if you are filing a claim for a disability benefit.
Make sure to fill out the form accurately and completely. Any errors or omissions can delay the processing of your claim.
After completing it, submit it along with the supporting documentation to the insurance company.
Once the claim is approved, the insurance company will issue the benefit to you or your beneficiary.
With proper planning, whole life insurance can provide multi-generational risk protection and valuable cash value benefits that endure throughout one's lifetime.
The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.
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Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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