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