What are the features of a whole-life plan? What are the usefulness of the plan to the policy holder?
Sonal Jain, Jaipur
A whole-life plan is a type of insurance plan, which provides risk cover for the entire life of the assured. These kind of plans are structured in such a manner that the policyholder has the option to pay premiums up to a certain age, say, 80 years. This age is commonly referred to as the ‘maturity age’. On attainment of the maturity age, generally, the policyholder no longer has to pay the premiums. At the maturity age, most of the insurers offer an option to the policyholder, either to continue with the cover, or to encash the maturity proceeds. In case the policyholder opts for the cover, he would not have to pay any further premiums, and the cover would continue unto the death of the policyholder. On the other hand, if the policyholder opts otherwise, then he receives the maturity proceeds and the policy ceases to exist.
