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There are several considerations and benefits to choosing a whole life insurance policy over other different types of life insurance policies. With so many options in the insurance marketplace, it is certainly confusing to choose the best insurance plan for you. However, here are a few advantages of whole life insurance plans to help you decide why this might be the right one for you.

Benefits of Whole Life Insurance

• Lifelong Insurance Coverage: The term whole life insurance is no misnomer! As the name implies, whole life insurance plans are designed to provide insurance coverage for your whole life, unlike term insurance policies, which only offer coverage for a specified period of time.

• Fixed Insurance Premiums: Premiums for other types of insurance policies generally increase over time to reflect the rising cost of protecting older policyholders. But for whole-life insurance policies, insurers average the entire cost so that you pay a predictable and level premium throughout your time. Having a fixed insurance premium can be easier for people to plan around the budget.

• Cash Value: One of the distinguishing features of a whole life insurance policy is "cash value". It means that the insurance premiums you pay towards your plan accumulate in a cash balance that you can use even when you are still alive! If you do decide to discontinue paying your premiums, your insurance plan may still be worth something to you. This, however, depends on how much cash has accumulated. On the contrary, term insurance premiums (pure insurance policies) only pay out upon a death.

• Encourages Savings: For those who require additional encouragement, paying a compulsory policy premium forces them to set aside cash that can be used at a later date.

• Flexible Money Options: The accrual nature of your whole life insurance plans will offer you several flexible options in the future - should you decide to discontinue paying premiums. There may be a waiting period before you can borrow against your cash value. You can also opt to stop paying new premiums, and stretch your accumulated cash value and existing premiums towards a reduced benefit protection.

• Possible Dividends: If you have a participating whole life insurance policy, you can receive dividends from your company. However, they're not guaranteed and are only paid out when your agency has excess investment earnings, favorable mortality statistics, or savings on expenses. You can choose how you want the dividends to be used: reduce your premium payments, paid out in cash, accumulate interest, or pay for paid up Additional insurance.

• Tax Deferrals: There are added tax benefits of whole insurance policies. The growth of interest in whole life policy is tax-deferred! In addition, if you have a basic participating policy, any dividends you receive will be considered a return of premium. They will not be taxed for until your total dividends exceed your total premiums.

• Certain Death Benefit: Policy holders are usually guaranteed a death benefit no matter when the holder dies, so long as the plan is active. This assumes the plan wasn't surrendered, and that premiums were continued. In comparison, under term insurance policies, beneficiaries only receive a benefit if the policy holder passes away within the period covered.
Article Source: http://EzineArticles.com/9456442

 Important Tips on Buying a Life Insurance Policy 

Introduction

Life Insurance comes with many benefits. Nowadays, life insurance isn't just a contract between the insurer and insured, which provides protection against risk of life by paying a premium. For sustainability in the market, every company and product need to adopt the current demand and circumstances and same goes with the life insurance products too. In these years of change in the market, regulator and life insurance companies have taken major steps to meet the changing demands which have provided customers with following options and benefits:-
  • Wide range of product portfolio
  • Options of saving and investment
  • Added benefits with life insurance
  • Different ways of getting low premium and high coverage
  • Additions in list of key features of life insurance polices
  • Transparency and hassle free procedure
With a pool of different companies, products and benefits to choose from, you need to pick out the best one for you. There are many things which you need to keep in mind before buying insurance and there is no specific guideline for choosing the best one, it all depends on your need and situation. But there are some important points related to every policy which can help you to filter the best insurance policies. Based on those important points, we have outlined following important tips for buying a life insurance policy.

Tips
  • Start early
Buying a Life insurance when you are young, gives you a lot of benefit. You will be able to get high coverage at a very low rate of premium because age has a direct effect the premium rate (younger the buyer, lower the premium is). In addition, with low premium, you will get better financial planning, long duration of coverage and your premium will be locked at a very low rate for your entire policy term.
  • Choose the right coverage amount
Don't decide your policy coverage on your feelings or on calculations based on single factors (like 10 times of your salary). While deciding upon the coverage amount, always consider your current lifestyle, debts, assets, future obligation (college education of children, settlement of your family to different locations, etc.), and rate of inflation. Choosing low coverage will give you zero benefit while choosing a high coverage will be a costly deal for you.
  • Comparison is the key
Comparison is very much necessary before buying an insurance policy. It helps you to choose the best policy at the best rate. There will be many polices which will not offer benefits which you are looking and may be available at different rates. There are many IRDAI certified comparison portals which provide a comparison of different policies on their websites which is unbiased and easy.
  • Choose the right policy
Different policies have different benefits, eligibility criteria, terms and conditions, exclusions and inclusions. You can choose the right policy for yourself only if you know about it well. So the key in choosing the right product is better understanding about it. Know about the riders available, add on benefits, what is not covered under your policy, premium rates and all other aspects related to your policy. Know your needs well and then find policies accordingly.
  • Choose the right company
There are more than 20 companies in India and it very much necessary to choose a trustworthy company. There are some companies which provide best insurance policies and are trustworthy also. You need to check the claim settlement ratio, review (by customer and experts), claim settlement process, product portfolio, price, etc. of different companies to choose the right one.
  • Understand the brochure
There is a brochure available with every Life Insurance product which is available on the company's website. It contains all the key benefits, features, eligibility, inclusions, exclusion, term and condition related to the policy. Go through every fine line of the brochure to understand your policy well. It will help you to use the available benefits and avoid any bad surprises in future.
  • Disclose your information correctly in the proposal form
Some people hide facts about themselves while filling the proposal form and giving personal details to the company. For example, some people tick themselves as a non-smoker while giving details to get low rate of premiums.

But later, at the claims stage, it could result in zero benefit as the claim will be rejected due to misleading information provided by the insured. You can't fool the company by giving wrong information.

So to avoid any hassle during the policy or at the time of making claims, it is always necessary to provide the right information about yourself to the company.

Never buy a Life Insurance policy in a hurry because it's a decision which will have an effect on your whole life. Give some time for research and understanding your needs well because a policy bought with precision gives you exactly what you want.

ComparePolicy is a leading IRDAI approved insurance web aggregator, providing buyers the customized assistance to compare and buy the insurance plans online. Our well-qualified & dedicated insurance experts' team is determined to provide you the unbiased suggestion, so you can easily buy the right insurance plans.
Article Source: http://EzineArticles.com/expert/Harjot_Narula/2249513