Over 1.5 lakh people die every year on Indian roads. It is nearly 11% of the total deaths due to road accidents in the entire world. Road fatalities are a reflection of the broader trend of rising incidents of untimely deaths in India. Normally, rising incidents of unforeseen deaths would lead to people opting for life insurance. But, India remains severely underinsured. According to the latest IRDAI annual report, the life insurance penetration in India stands at a paltry 2.76%. Simple and affordable insurance products like term insurance could be a potent tool to boost life insurance penetration in the country.
Certain changes in the socio-economic profile of the country, however, may lead to gaps in the term insurance coverage. The average life expectancy rate at birth for women has risen to 70.4 years and men to 67.8 years. In some states, the improvement has been more dramatic. For instance, females in Kerala can expect to live until 77.8 years of age, while men in Delhi have a life expectancy of 73.3 years. Though term insurance provides considerable coverage, it has a limited tenure. Typically, a regular term insurance plan ensures coverage until 75-80 years of age. With longer lives, regular term insurance may not be enough, but you can still ensure life insurance for the entire life.
Whole life term plans are term plans that provide coverage up to 99 years of age. These plans are slightly different from regular term insurance.
- Premiums: Affordability is the defining factor for term insurance plans. You can get substantial coverage for a relatively small amount. The premiums for whole life term plans are higher than regular term plans. Besides the obvious reason of a longer coverage which considerably increases the risk for the insurer, whole life term plans also have survival benefits. The premiums of whole life term insurance remain constant for the entire premium payment term. On the other hand, the premium of regular term insurance plans increases with age.
- Benefits: A regular term insurance only guarantees death benefit which is paid in the event of death or diagnosis of a terminal illness of the insured. After the payout of the sum assured, a term plan terminates. On the contrary, a whole life term plan guarantees survival benefits along with death benefits. Some whole life term plans declare a bonus part, which is paid to you as cash value. Some whole life plans just return the premium on the maturity date and pay the sum assured as survival benefit if the insured reaches 99 years of age. The nominee is liable to get the sum assured in the event of the death of the insured or diagnosis of a terminal illness any time before the age of 99.
The cash value of a whole life term plan can also be utilized to avail loans at low-interest rates. Whole life term insurance is essentially a protection-cum-savings plan. Besides offering financial protection to your family for your entire life, a whole life term plan also helps you save for the future. With the wide variety of features offered by whole life or permanent term insurance,
Should you buy one?
The final decision to invest in permanent term insurance depends on the physical and financial health of the policyholder. Considering the changing socio-economic dynamics, it is better to opt for a whole life term insurance. The chances of living a longer life have significantly increased and regular term insurance will cost substantially higher in the later stages of life. The cost of permanent term insurance will remain constant. Moreover, the benefits of a whole life term plan are assured, unlike market-linked insurance products. You and your family are guaranteed of receiving the sum assured and can formulate life goals accordingly.
There are several regular and permanent term plans available in the market. But one should keep the credibility of the insurer and the flexibility offered in mind. With the iSelect+ term plan from Canara HSBC Oriental Bank of Commerce Life Insurance, you get multiple coverages as well as payout options. It can be customized as per your requirements. The trusted parentage of Canara HSBC Oriental Bank of Commerce Life Insurance ensures that your family doesn’t have to worry about money in your absence.
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