Among the various life policies that we can take out, the so-called Whole Life Insurance are the ones that best respond to the need to offer economic coverage to the family or close friends of the insured person in the event of death.
These types of policies have some advantages that make these one of the most popular insurance products of those marketed as Personal Insurance. As in the rest of Life Insurance , these policies indemnify the beneficiaries that are established in the policy with the insured capital, with the aim of compensating for the loss of income obtained before the death of the insured.
This money can also be used by the heirs to cover the expenses involved in the procedures for the transfer of assets and to pay the debts that the insured had.
The Features of Whole Life Insurance That Make It So Attractive
The main characteristic of Whole Life Insurance is that the coverage for death does not have a defined term, since this policy covers the death of the insured person regardless of the moment in which it occurs. No matter when it occurs, the insurer is obliged to pay the insured capital to the beneficiaries at the time of the claim. In addition, the insured capital can be paid in the form of an annuity or capital.
On the other hand, this type of Life Insurance offers several alternatives to pay the premium, which makes it easier to hire. In addition, many Whole Life Insurances allow the addition of additional guarantees that increase the protection of the insured in the event of permanent and absolute disability.
Therefore, this insurance product offers interesting advantages that we will now list:
Life Insurance for life
The coverage of these policies does not include terms or renewals. In Whole Life Insurance, the coverage extends until the death of the insured, when it occurs and whatever the cause.
This characteristic makes it a very attractive insurance product for those who want the economic protection it offers to the beneficiaries to be available at any time.
Whole Life Insurance offers several modalities for the payment of the premium
In Whole Life Insurance we can find offers with different payment methods for premiums. In this way, we can choose the one that interests us the most, depending on our personal circumstances. These are the most important modalities:
Lifetime bonus
In this modality, the policyholder pays the policy fees periodically, until the death of the insured occurs.
Temporary bonus
In Whole Life Insurance of this modality, the premiums are paid for a specific period, for example 20 or 30 years, although the Insurance coverage extends until the covered claim, which is death, occurs. One thing that we must take into account in this type of policy is that, as the occurrence of death is the same and the premium payment period is shorter, the premiums will be higher than those of Life Premium Insurance.
The right of redemption of the policy
Whole Life Insurance there is a right of redemption. This right refers to the possibility of terminating the contracted Insurance contract and “redeeming” part of the capital already contributed. In this way, the policyholder stops paying the premiums and receives in cash money that is determined by the mathematical provision (resources accumulated by the insurer to guarantee the payment of indemnities), commissions and unamortized expenses.
In Canada, the Life Insurance redemption is a right of the policyholder, which can be exercised as long as the premiums corresponding to the first 2 annuities have been paid. However, it is important to check if a Life Insurance that we want to contract maintains this right in its condition or includes clauses that modify it in any way.
On the other hand, our policy may contemplate the right of insurance rehabilitation. It is related to the redemption, since it allows the initial conditions of the policy to be resumed, if the premiums that should have been paid had the first contract been active are paid.
The reduction of Life Insurance: maintain coverage, paying less
In Whole Life Insurance we can find various formulas that help the policyholder to keep the policy in force at certain times when, for whatever reasons, the insurance premiums cannot continue to be paid.
One of them is the reduction of the Insurance, which consists of the right of the policyholder to partially rescind the policy contract, as of the first 2 years from its signature. This right allows you to stop paying the premium, although the Insurance remains with reduced benefits.
If what is decided is to pay a lower premium, the compensation will be reduced proportionally, but the Insurance is not canceled.
Life Insurance that allows you to receive advances
In Whole Life Insurance there is a way to respond to the possibility that the insured needs part of the money invested in this protection. This is the advance payment of the policy , which is really a loan that the insured can have at the expense of the insured capital and whose amount cannot exceed the surrender value.
The advantage of the advance is that the policyholder has the right to receive it in cash once requested, as long as he has paid the first 2 annuities. It is money that we have at hand and that can come in handy at a certain time.
Of course, it is convenient to be well informed of how the advance works in each policy, since this loan accrues an interest that the insurer can charge us in the following premium payments.
Compare before hiring whole life insurance
As we can see, there are several things that we must take into account when hiring Whole Life Insurance. In addition to the advantages of this type of policy, we can generally include additional guarantees to the life policy that increase the coverage of the policy, as appropriate.
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In these Insurances the price is also important, that is why we invite you to try our online insurance comparator. Just by filling out a questionnaire, we compare the best offers from specialized insurers and get the best price for your policy. In addition, our team of Insurance advisers can advise you on the choice of your Life Insurance and answer any questions that may arise during contracting.
