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Whole of Life Insurance By Damodhar Mata

What is Whole of Life Insurance?

Whole of Life Insurance, as the name suggests, it provides life cover for the whole life of the insured. 

In addition to life cover it also includes investment, which accumulates a cash value over the life of the plan.

This cash value is one of the important elements of whole life insurance.

Need for Whole of Life Insurance❖ Such policies were designed to address the short comings of a

term insurance. 

❖ The biggest challenge with term life insurance is that it offers cover for a fixed term, usually up to 70 years.

❖ If the insured dies after the term ends, the beneficiary does not receive the death benefit nor does he get back the premiums paid  because the insured did not die during the term.

❖ All the premiums paid into a term insurance plan are an expense and the money has no chance to comeback.

Term Vs Whole Life

•Term Insurance can be compared to a rented house, where you can live as long as you pay rent, if you stop paying rent, you can no longer can live in the house.

•When you leave the house you do not get back the rent you have paid.

•Whole of life plans can be compared to a own house on a mortgage, where you pay the mortgage for a certain period, once the mortgage is paid the property is yours.

•When you sell the property you can expect to get more than what you have paid for it, similarly a whole of life plan pays out a cash surrender value, when you feel that you no longer need cover and surrender the plan.

Features of Whole of Life Insurance

✦ Life Long Critical Illness Cover

✦ High Price but Low Cost

✦ Flexible

✦ Accumulates Cash Surrender Value

✦ Ideal Legacy Planning Tool

Why Buy Whole of Life Insurance?

1 To provide funds to pay for medical expenses due to critical illness during retirement.

2 To provide income for dependent family members in the event of death of the bread winner until they become self-supporting and to leave a legacy for children and grand children

3 To provide large amounts of cash at death of bread winner; for children’s college expenses, marriage expenses or other capital needs

4 To provide cash for repatriation of expat family and for paying inheritance taxes in their home country if applicable.

5 For protecting business liabilities of owners and partners

6 To ensure business continuity in the event of death or critical illness to one of the partners.

7 To indemnify a business for the loss of a key employee

8 To provide for charity on death of the insured

Summary

✦ Whole of Insurance is ideal for long term protection needs, although the monthly

premiums are usually higher than term insurance, it costs less in the longer

term.

✦ Zurich Futura, Metlife Future Protect and Hyat Plus from Salama are some of

good whole of life plans available in UAE.

✦ To know more about Whole of life plans or to help you choose the most suitable

plan with complementing riders visit www.financialplanningindubai.com