Online term insurance schemes, broadly speaking, consist of a fixed term and are popular thanks to their easy affordability and flexibility. However, over the years, the insurance industry has come up with century-old life cover plans. To make it clear, it is not a capricious enterprise on the part of the insurance market. There are obvious reasons for the change.
First and foremost, today people tend to work beyond their retirement age. Also, thanks to the economic progress of modern society, life expectancy has also increased considerably. Many superannuated people generally seek to channel their retirement years into creative pursuits. Therefore, it was out of an evident social shift that insurance companies introduced the whole life cover plan.
There are certain fundamental differences between a whole life cover plan and regular online term insurance. First and foremost, the basic difference is, of course, the tenure of the plan. Where a conventional term plan usually has a tenure of around eighty to eighty-five years, the whole life cover plan provides a hundred-year tenure.
There is an obvious advantage of whole life cover plan compared to conventional insurance schemes. The latter usually does not give the policyholder any scope whatsoever to make substantial savings. Whole life cover plans, on the other hand, allow both insurance and savings at the same time. Therefore, customers generally flock towards the whole life cover.
It is equally significant to note that whole term plans are not a recent inclusion. Essentially, such plans were meant to cater to savings pursuits and cases of legacy planning. However, the insurance industry has come up with a pure whole term plan which makes the process easier and more affordable. Besides, estate transfers are easier facilitated by a whole life term plan.
Apart from that, one can also look at from a different perspective. While conventional term holders generally lament upon the loss of money should they outlive the plan, the prospects of money back are naturally guaranteed in case of the whole life cover term plan. This is yet another solid ground for people to flock towards whole life term plans.
Naturally, since the tenure is higher, premiums are higher too. Generally speaking, premiums for whole term plans are around twice the rate of premiums for conventional plans. However, the question is whether higher premiums are at all worth it.
It is up to the potential customer to decide upon the several contours related to it. First and foremost, it is important to keep in mind the aspect of longevity. In that case, longevity can only be catered to by whole life term plans, which is pretty evident. Secondly, whole life term plans are not just meant for addressing income issues. They can instead be channelled to higher causes such as legacy planning and inheritance. These issues can only be addressed by the likes of a whole life cover term plan.
All said and done; it is up to the potential customer to decide upon the perspective to take while planning to take up the plan. Should he or she have immediate demands, it is worthwhile to go for conventional term plans. On the other hand, financial requisites related to posterity are best addressed by a life term plan. According to experts, it is a fairly good investment choice in that it can cater at once both to immediate issues and posterity requisites. The customer should make a comprehensive study before deciding to buy an insurance scheme.
The Ideal Customer
Lastly, who at all is the ideal customer of a whole life term plan? Ideally, a life term plan is basically for those who look for long term protection. However, if one is looking to address immediate financial concerns, it is naturally wise to go for conventional term plans such as SBI term insurance, for instance. After all, a healthy standard is to have an insurance cover which is at least ten times the policyholder’s annual earnings.
At the same time, it is equally imported to consider what the insurance experts say. Most experts are of the view that insurance schemes, conventional or otherwise, should be taken up after a thorough evaluation of one’s earnings, savings ratio, financial goals and long term aspirations. That way it is easier to look at things from a solid perspective, thereby enabling one to appropriate the choice better.
In today’s world, the whole life cover term plan is usually a favourite among the upper-class individuals who have a lot to leave behind for their families. Such inheritance related aspects cannot always be imaginable to the low-income group who are naturally more concerned with immediate issues. In most cases, as experts say, whole terms are generally gifted away by grandfathers to the younger generation.
If one comes to think of it, a person who is twenty to thirty years old must prefer protecting his or her family. In that case, the primary priority should be a conventional term plan. Once the years pass by, the policyholder, by the time he or she has crossed the forty-year limit, can then hope to shift perspective and go in a different direction. Middle age brings to mind the issues of long term protection and other related aspects. Consequently, as the goal posts shift, the term plans must also change. It is only a matter of gaining a solid perspective to make informed choices, keeping in mind both short term and long term goals.
As mentioned at the outset, whole life term plans are not a result of caprice in the insurance industry as cynics would at times judge it to be. There have been evident social shifts in the ground, such as lifestyle changes and thought perspectives, which have made it necessary to address issues with a different standard. At the end of the day, it is the customer’s call. All said and done, whatever the decision, it should not be ill-informed one.