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Whole life and universal life insurance have a number of similarities, and both are great options to provide protection to your family members. The main difference lies in their nature: whole life typically remains unchanged- most of the features are guaranteed for life - whereas universal life offers flexibility. With these plans, you can create wealth and save on your yearly taxes. You can compare whole life vs universal life insurance in India online and buy the one that fits your needs.
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Here is an overview of all the differences between whole life vs universal life insurance in India:
| Distinguishing Features | Whole Life Insurance | Universal Life Insurance |
| Premium Amount | Fixed throughout the policy | Variable except for the fixed component attached to the life cover |
| Coverage Benefit | Guaranteed death benefits, once selected, can’t be changed | Death benefits can be increased or decreased during the policy term |
| Rate of Interest | The rate of interest associated with the cash value is fixed at the time of policy issuance and accrues annually | The rate of interest is subject to changes based on market performance |
| Cash Value Accumulation | Guaranteed, however, may be lower than universal life insurance. | Significantly higher returns, however, are subject to market-linked risks. |
Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
Term Plans
Whole life insurance is a type of life insurance that offers financial protection to your family for your entire life, i.e., till the age of 99/100 years. This typically means that even if premiums are payable for a fixed tenure, the assured death benefit remains valid throughout your existence.
A whole life insurance policy ensures that your loved ones are financially secure in your absence, as the insurer provides guaranteed death benefits to the nominee on the death of the policyholder. Such insurance policies are especially important if you have several dependents to look after, want to create a financial legacy, or need some high-value capital for the future.
Here is a list of some key features of these types of life insurance plans:
Death and Maturity Benefits: These plans offer death and maturity benefits on the death of the life assured and on the maturity of the policy, respectively.
Flexible Premium Payments: These plans have flexible premium payment terms and modes from which you can choose the most suitable way to pay your life insurance premiums online or offline at your convenience.
Cash Value Accumulation: Whole life insurance plans accumulate a cash value that offers wealth creation benefits and acts as a savings avenue.
Long Term Coverage: The large policy tenure ensures guaranteed financial protection of the family members in the event of the policyholder’s unfortunate demise till the age of 99/100 years.
Tax Savings Benefits: You can claim life insurance tax benefits as per the prevailing tax laws under sections 80C and 10(10D) of the Income Tax Act, 1961.
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| Advantages of Whole Life Insurance |
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| Disadvantages of Whole Life Insurance |
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Note: Know what is term life policy first and then buy a term plan for your loved ones.
Note: It is suggested to calculate the term plan premium on the term plan calculator online tool by Policybazaar before buying.
Universal life insurance is also a permanent life insurance offering dual advantages of savings and protection. This type of permanent life insurance differs from whole life insurance in terms of its flexibility in how much premiums to pay and options to increase/decrease your death benefit amount.
Here is a list of benefits of universal life insurance:
Life cover throughout the lifetime of the policyholder
The adjustable death benefit amount
Option to decide the premium amount
A part of the premium goes into the savings account
Option to encash cash value once it reaches a specified limit
Cash value may vary depending on market performance
| Advantages of Universal Life Insurance |
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| Disadvantages of Universal Life Insurance |
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Here is the main difference between whole life vs universal life insurance in India:
In whole life insurance, you get guaranteed death benefits on the death of the policyholder, lower premiums, and cash value accumulation.
Universal life insurance offers flexibility instead of guarantees. You can increase or decrease your premiums each year to receive higher or lower returns, which will also ultimately impact the death benefit and cause cash value to fluctuate as well.
The choice between plans depends on your specific circumstances and needs. If you are uncertain about your ideal policy type, consulting with a financial services professional can be beneficial. They can provide insights into various insurance products and features, guiding you through tailoring a strategy personalized to your family’s requirements. Our Policybazaar agents are available to assist you in exploring your options and crafting a customized approach.
Both whole life and universal life insurance plans are types of life insurance that offer benefits suited to fit the customer's needs. You can assess your family’s requirements and buy the plan that best suits their needs. Before buying, it is suggested that you compare the benefits and features of whole life vs universal life insurance in India to choose the right plan for you.
Note: Check out the best term insurance policy in India and choose one that suits your requirements.
Note: You should also check the benefits of term insurance if you are planning to purchase the term insurance plan.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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