Is Whole Life Plan a better life insurance option for you

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Is Whole Life Plan a better life insurance option
for you
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• Whole Life plan provides life insurance cover for
  the entire life of a person or 100 years, which
  is less. Unlike fixed term plans or endowment
  policies, whole life insurance policies provide
  financial security throughout the life of the
  insured. However, there is an endowment or
  "saving" feature built into the whole life plan.
  A portion of the premium in a whole life plan
  goes towards the life insurance cover, while the
  balance is invested to provide return on
  investment for the insured.

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• Whole life plans are quite popular in the
  advanced economies like the US, and are gaining
  popularity in India as well. How does whole life
  insurance work? The insured pays premiums every
  till a certain age, known as the maturity age. As
  discussed earlier, a portion of the premium goes
  for the life insurance cover and the balance is
  invested, just like in an endowment plan. If
  profits are made on the investments, the insured
  gets a bonus on the invested amount. Once the
  maturity age is reached, the insured has the
  option of either continuing with the life
  insurance cover till death or surrendering the
  policy and taking the benefits which includes sum
  assured and bonus, if applicable. What is the
  maturity age? It is usually between 80 to 100
  years, but some plans have lower maturity ages.

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• There are different whole life insurance plans,
  like policies with single premium, limited pay,
  limited pay with money back and regular pay
  options. In the event of an untimely death of the
  insured, the nominees will receive the sum
  assured. Generally, the premium for whole life
  insurance plans remain constant during the entire
  term of the policy and the insured gets life
  insurance cover right throughout.

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Should you opt for term plan or whole life plan?

• The premium of whole life insurance plans is many
  more times than that of the premium of a term
  plan. Compared to a whole life plan, if you buy a
  term plan and invest the difference in premium
  between the whole life plan and term plan in a
  higher yielding investment option, like SIP in a
  good equity fund, you will be better off in terms
  of total investment returns in the long term.

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• Term plans have a fixed term. If you are 25 years
  old and buy a term plan with a 20 year term,
  beyond the age of 45, you will have no life
  cover. If you do not have a life insurance policy
  beyond the expiry of your term plan, then your
  family will not have the financial protection, in
  the event of an untimely death, unless you buy
  another life insurance policy to cover yourself
  beyond the expiry of your term plan. Whole life
  plans, on the other hand, cover you for your
  entire life.

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• The premiums of whole life plans, increase with
  the age of the proposer (or insurance buyer). For
  example, if you are 45 years old, then the
  premium of the whole life plan is very expensive.
  It would be better, to take a term plan and
  invest the balance.

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Source https//www.advisorkhoj.com/articles/Life-
Insurance/Is-Whole-Life-Plan-a-better-life-insuran
ce-option-for-you