Whole Life Policies

About Whole Life Policies

Whole life insurance Plans aims to provide lifelong protection & coverage against death or TPD, and in some products Critical Illness (CI). They can either be with participating or non-participating component. As such the purpose of this policy, it is usual that the policy term is longer as compared to other types of insurance such as endowments. Cash value is also present in whole life policies which is built up over years of premium payment.

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Types of whole life Policies

Participating whole life policies share in the profits of the company’s participating fund. Your share of the profit is paid in the form of bonuses or dividends to your policy. Bonuses or dividends are not guaranteed as they depend mainly on the investment performance of the participating fund. When you make a claim, bonuses or dividends which have been declared will be paid in addition to the sum assured.

Non-participating whole life policies have guaranteed claims benefits and cash values.

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Pros

• Lifelong coverage, as most whole life policies either covers the rest of the life on the life insured or till 99 years old.

• Cash value is accumulated over the years

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Disadvantages

• Premiums are usually rather more expensive as compared to term plans

• Whole life policies requires a long period of commitment which can range from 15 years or longer depending on the premium amount you pay

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In Conclusion, it all lays on one’s personal needs to have the right policy & coverage. Whilst Whole Life plans are generally more expensive in premiums, you need not worry on the expiry of the coverage as is a protection policy that aims to provide permanence in coverage that may benefits dependants in the event of death / TPD / CI.

You should always consider if you have any dependents and when are they financially self-reliant.

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Since it’s a long-term commitment, early termination will result in monetary losses. Always consider your affordability of the premium.

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ave an existing whole-life policy already that you are struggling to commit? Let me know in the comments below or pm me for further advice on alternatives and options.