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Guide to Whole Life Insurance by Canara HSBC OBC Life Insurance

Guide to Whole Life Insurance by Canara HSBC OBC Life Insurance

Term Insurance and Whole Life Insurance

A whole life insurance policy, as the name suggests, covers a person for the whole of their life, in most cases up to the age of 100. A whole life plan is like a term insurance plan with no fixed policy duration. Unlike term plans, which have a specified coverage term, whole life coverage extends up till a lifetime.

The plan runs for the entire lifetime of the insured until they attain 99 or 100 years of age and if something unfortunate happens during this period, the sum assured is paid as the death benefit to their nominees. In addition, if you outlive the age of 100 years, the insurance company pays out the maturity benefit.

Several whole life insurance plans may also offer partial withdrawals after completion of the premium payment term.

How does a whole life plan work?

A whole life plan is different from a regular term insurance plan that covers you for a specific period. Understanding how a plan works can help you decide whether it is a fit for you or not. A whole insurance life plan can be purchased against a regular payment, know as premiums, for the tenure of the policy. The plan, on occurrence of a misfortunate event, pays your nominee a lump-sum amount that can be used to pay for bills and regular life expenses.

Whether you are starting off late or for any other reason want the life cover to continue after your retirement, a whole life insurance offers a great coverage solution. The whole life insurance plan from Canara HSBC OBC Life Insurance offers features which will be quite handy for you.

When to choose Term Insurance and Whole Life Insurance

It offers a limited premium payment term option, wherein you pay premiums only in your earning years and stay covered for longer, past your retirement years. In this case, although the plan does not have any maturity value, long tenure ensures that your family gets the funds even after your natural death.

Whole Life Insurance Option with iSelect Star Term Plan

Canara HSBC OBC Life Insurance offers a Whole Life Cover plan option under the Plan Options Life and Life Plus of the iSelect Star Term Plan. The plan option pays your beneficiary a sum assured on occurrence of death or on diagnosis of terminal illness, whichever happens earlier. However, in case of survival till maturity, the total premiums paid are refunded to you on the date of maturity.

Further to its whole life benefit, the policy continues post maturity till you attain 99 years of age which is called the extended cover period. During this period, a sum assured is paid on occurrence of death or on diagnosis of terminal illness, whichever happens earlier. Plus, on attaining 99 years of age, you will receive the sum assured and the policy terminates upon payment of these benefits.

Limited Premium Payment Term Option

Premium payment term is the duration within which you pay all the premiums of your policy. In case of limited premium payment term option, you pay for a duration that is less than your total policy term. Limited Pay does not only help you reduce the burden of paying premiums for long policy durations, but also ensures you save money on the total premiums paid, compared to paying premiums for a regular term equal to the duration of the policy.

Additional in-built protection covers

With the iSelect Star Term Plan, you can choose any of the following optional in-built covers. These are additional benefits that pay a lumpsum apart from the amount payable on earlier of death or on diagnosis of terminal illness. These include:

  • Accidental Death Benefit (ADB) pays an additional sum on death due to accident.
  • Accidental Total & Permanent Disability (ATPD) allows a waiver of all future premiums payable for the respective life, on occurrence of accidental total and permanent disability, and the policy will continue with the other coverages that have been opted for by you.
  • Accidental Total & Permanent Disability (ATPD)- premium protection plus pays an additional sum along a waiver of all future premiums payable for the respective life, on occurrence of accidental total and permanent disability, and the policy will continue with the other coverages that have been opted for by you.
  • Child Support Benefit (CSB) pays an additional sum to safeguard your child’s future. This amount can be utilized to take care of all the milestones you have planned for your child.

Lump-sum payout to the nominee

The whole life cover pays out the entire benefit as a one-time lump-sum amount to the nominee. This lump-sum helps ensure your family gets timely financial support. This amount can cushion your family from the effect of inflation in the coming years as they get to retain the full amount and can then make investments as per their preferences.

So, a whole life cover is ideal for you if you wish to provide lifelong protection to your loved ones. While the costs may be a little more than a regular term plan, the survival benefits will be built over time which eventually yields better benefits for your family. Plus, the survival benefit at the end of the policy term will be an added benefit. Tax benefits are also available to the insured under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

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