Life insurance covers are based on the time period for which they exist. There are two main types of life insurances – term insurance and whole of life assurance. The first one is called an insurance because you may claim if there is an event of death within the term of the policy. Contrary to that whole of life is an assurance that you can surely get the claim in the event of the death of the policyholder. That is why it is often called an assurance.
Whole of life insurance in detail:
Let us check some of the details of whole of life insurance. For better understanding and pre investment details, it’s important that you know what this kind of policy is all about. Some of the characteristic features of whole of life assurance are:
You will surely get returns!
Yes! If you have paid premiums regularly, then there are no chances of the policy lapsing. The insurance provider will get you the returns if you die and do that without any fuss. Term insurance is in contrast to this and will lapse if the policyholder does not die within the span of the policy.
The premium cost is higher!
As the claim is inevitable and the payment is guaranteed the whole of life assurance would charge higher premiums from the policyholders. You will be paying the premiums till you reach a certain age. The premiums would not be charged after an age of 85 or 90. The exact age would depend on the insurance provider. So, this policy is certainly costlier than term insurance whereby you need to pay premiums for a couple of years only.
Premiums vary as per age!
Some insurance companies offer fixed premiums for a fixed period of time. In this case, you know the total cost of the policy and the pay-out at the end of the term. Some insurers offer a fixed premium till the policyholder reaches a certain age like 70 or 80 years and then there is no need of paying premiums. The cover still continues till you live. This way, you will be covered without any extra payments.
Try balanced cover for fixed premiums!
The standard or balanced cover is designed in a way that the policyholder needs to pay fixed premiums for the lifetime. There will be no rise in premium with the increase in the age of the policyholder. But there are no guarantees and so, you must read the small print of the policy so that you know everything in detail. You can also check with your insurer about the rules of the policy.
Check whether you need Whole of Life Assurance
Some people may not need a whole of life insurance if they have crossed a 70 year mark and do not have a mortgage or liabilities. They can actually encash the money by surrendering the policy. However, the value returned would be much less than the sum of total premiums. You can continue the policy if you want to leave back a lump sum amount for your family and kids. But if you don’t have dependents, then there is no point in keeping the policy unless you want to pay for the funeral cost. So, do analyse the need for a whole life cover and then decide accordingly.
Keep these points in mind if you ever plan to buy a whole of life insurance cover. Also, get expert advice on the need of the policy and the best insurance provider available. For getting the cheapest deals and best life cover, contact FreePriceCompare.com on 0808 168 2466.
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