Using Whole Life Insurance to Secure Your Child’s Future

Written by : Knowledge Centre Team

2025-12-27

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12 minutes read

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There was a time when parents would feel proud to have built huge properties for the next generations. The estate will pass on and the inheritance would be a welcome tool of survival for the children and their children.

But times have changed, and the younger generation often moves out of town and usually has less interest in the ancestral properties. Basically, an old real estate in a different far off town is more of a burden for this busy generation.

So, we must adopt an alternative approach for leaving an estate for the next generations, and what better than a large sum of money.

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What is Whole Life Insurance Plan?

Whole life insurance plans as the name suggests are life cover for a lifetime. For example, if you buy whole life insurance, such as the iSelect Smart360 Term Plan at the age of 30, the policy will continue until your death.

Or in the case of whole life term insurance, which is more pocket friendly, maximum tenure is limited to 99 years of age. Still, far beyond the average life expectancy in India. Basically, this plan will ensure that your family receives the death benefit payout even in case of natural death.

This payout will become an estate for your kids which they can use in ways they like. Also, unlike physical assets like real estate or gold, it gives more choices to the families.

Why Cash is a Better Asset?

There are multiple reasons you should choose cash and financial assets over real assets like property or gold for your next generation.

Liquidity: Liquidity or the ease of turning the asset into cash is one of the greatest concerns with real assets. Real estate is especially tough to put in use for rental income or turn to the market for capital gains. While gold may be easy to convert, the value may face huge changes. In short, lack of liquidity makes these assets useless in the short run, and even costly to manage.
Managing Cost: Managing real estate or any other real asset requires effort as well as money. Which means property in another city is more likely to be a burden than a seamless wealth. Similarly, gold and other precious metal ornaments suffer from this disadvantage.
Future Economic Situation: Economy and investment markets are already volatile, and change tracks regularly. The unpredictability of lifestyle also makes it impossible to rely on a fixed asset. So instead of relying on any one asset class, using multiple assets is a better idea.
Cash Gives More Choices: You can never be sure of the situation your child or her family would be in the future. They could be struggling to meet the higher education goal for their child or wanting to buy a house of their own in the city they are working. While cash would be a ready help for them in any case, a property in another town could be a drag.

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Selecting the Best Whole Life Insurance Plan

You need to carefully choose the best life insurance plan with whole life features so that it doesn’t become a bottleneck for your kids or for you. These important features are:

Claim Guarantee Conditions: Claim guarantee conditions ensure a fast and seamless claim settlement and can make life much easier for your dependents. The usual claim settlement deadlines may vary from 30 to 45 days without a claim settlement guarantee.

With settlement guarantee, insurers process claims much faster. For example, Canara HSBC Life Insurance whole life term plan can settle the claims within 1 day for eligible policies.

Maximum Age of Cover: You may wonder why you would need to check the maximum age of cover for a whole life plan since it anyways has to cover you for the lifetime. Key to this factor is the definition of whole life followed by the insurer.

For some insurers, whole life policies may consider covering you only till the age of 80, while others may consider 99. There are more whole life policies which offer maximum age of cover beyond 100 years of age.

The maximum age of cover beyond 99 years of age increases the premium cost dramatically. Not only that, cover till 80 may be insufficient if you are below 35 years of age given the rising life expectancy.

Premium Payment Tenure: Life-time cover is alright, but you would not want to keep paying the premiums till the end of your life. So, it is very important that you have the option of paying all the premiums within a shorter period, preferably before retirement.

For example, if you are starting a whole life term plan at the age of 40, and expect to retire at 60, your maximum premium payment tenure should be 20 years. So that you can stop worrying about the premiums at the time of retirement while the cover continues.

Apart from other financial assets, you can use to leave a legacy for your children, whole life term insurance allows you to leave a definite amount. Since the benefit amount is pre-defined and is unaffected by market conditions, your progeny have the best chance of receiving the entire sum as you intended.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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