All About Graded Benefit Whole Life Insurance

-

With the plethora of insurance policies available in the market, it can be quite confusing for a normal person to differentiate between various types of insurance plans. From amongst various types of plans, two of the most popular ones are: unit linked insurance plan and graded benefit whole life insurance. Here we give you a low down between these two types of policies.


graded benefit whole life insurance



Graded Benefit Whole Life Insurance

As the name implies, graded benefit whole life insurance policy, you are covered for your entire life. This means you get insurance cover as long as you live or till 100, whichever is earlier. Certain graded benefit whole life insurance policies like Tata AIG’s Mahalife Gold allows you to premium for the initial 12 years only, while offering life cover for your entire life. You can also get a certain percentage of sum assured after the initial 5 years. Whole life insurance policies invest mostly in debt instruments to generate returns. You can choose a policy with or without bonus. With bonus policies carry higher premiums. Once the policy expires, you or your family members are eligible to get the sum insured along with bonuses accrued. For bonuses, Max New York’s policy is the best. The charges for a whole life insurance policy are not declared.



Unit link insurance plan 

Also popularly called as ULIP, unit link insurance plan is the new product offering from insurance companies. A unit link insurance plan has the flexibility of investing its corpus amongst various asset classes viz, debt, equity or a mix of two. This gives you the option of choosing the investment option as per your risk appetite. So if you are young and/or have high risk appetite, go for the growth option that invests predominantly in equities. For a middle-aged person having a moderate risk appetite, balanced option that is a combination of debt and equities is advisable. Those who don’t want to take risk, debt option is the best choice. Like a mutual fund, net asset value of a Unit link insurance plan is declared by the insurance company. But the major drawback is that this plan carries very high charges. Also some advisors have misled people by telling them that they have to pay premium only for the first three years.



Whole life insurance or unit link insurance plan: Which is better?

 There is no clear cut answer to this question. While both the plans offer tax benefits, unit link insurance plan is better if you want to enjoy the flexibility of investing across various asset classes or if you want higher returns. On the other hand, whole life insurance plans are good if you want a life cover for your entire life, without having to pay higher premium as you grow old. They are also good if you require periodic payouts. However it is better to consult a financial advisor before buying any insurance policy, since insurance is a lifetime commitment. This will ensure you are adequately protected and in case of your death, your family is quite well protected.

Comments

Post a Comment

Popular posts from this blog

Which statement is true about term life insurance?

-
Image
Which statement is true about term life insurance? The difference between whole  life insurance  and term  life insurance  is that the former covers the holder for the duration of their life, not just a fixed term. There is also the perception that there is more value in this because the insurance company returns some of your premiums which it invests, which in theory means the sum grows. Usually the death benefit premium is not affected by this type of policy.  Which statement is true about term life insurance? There are a few variations on this type of policy. For instance, there is a single-premium, which allows wealthier people to put a lump sum into their policies and leave it there. The standard policy usually has month premiums and often provides the policy-holder with a minimum guaranteed return. Some suggest that one of the benefits these policies provide over other types is that some of the premiums go toward the cash value of the policy. It also normally remains constant thr
Read more

Find Better Mexican Boat Liability Insurance

-
Image
There is a very sound and solid reason why the large regulatory bodies of financial agencies and government insist and set a mandate for everybody who owns something precious to get an insurance cover for it. Although everybody has plans and expectations with their endeavors that they undertake to fulfill their desire as well as requirements through various things. But the uncertainties of life can't be planned for, neither that can be perceived; for they are unknown and hidden in time. Fine insurance policies act as a cover to protect one from such kind of trouble and possible loss. It can limit the extent of the damage or loss that may have been incurred or cause by a person who was under the cover of an insurance policy. Various kinds of insurance policies are available for multiple kinds of commodity and things that could be covered protectively. This includes almost anything and everything, from property to life of a person. Even the boat could be insured for any liability the
Read more

Prepaid Funeral Insurance

-
Prepaid Funeral Insurance How Does Funeral Insurance Actually Work?  We have all seen the television advertisements on American TV. Real  Prepaid funeral insurance  is spending a fortune on TV ads at the moment, claiming we need to think of how hard it will be for our loved ones to pay for our funeral when we die. These ads are very smart and plays on the conscience of the Baby Boomers wanting to the lives of their families easier. It got me thinking “ how does funeral insurance actually work? ” Funeral insurance is also termed as pre-planned insurance plan or burial insurance, which is a part of life insurance. This type of insurance is particularly useful for one’s life at their final expenses such as funeral ceremonies, flowers, caskets, etc., which is needed after their death. The customer may also choose the coffin which they want, and they can also tell the things that they needed at the time of their funeral service to the particular insurance company. Usually the customer pays
Read more