How Payouts Work in Whole Life Insurance?

Whole life insurance policy offers coverage of life without any limits. If go a term-insurance policy, the coverage will be for one year. You should go for a different policy as per your needs. If you pay premiums on a regular basis, the whole life policy will cover the risk and the benefits are available for the nominee or dependents as per the agreement. The insurance policy will declare bonus on annual basis. The bonus is nothing but the profits gained by the company in a financial year. The bonus amount will be distributed among the eligible candidates.

Benefits of whole life insurance

The payouts will make a real difference with a whole life insurance policy. The policy provides financial security for dependents. You can go through the whole life insurance payout calculator to understand the premium and benefits that you will can with the policy.

Financial emergency – Even though you plan all your financial needs and save money, it will be difficult to overcome various contingencies in life. Life insurance cover will protect the interests of family members. You can choose a policy that covers the risk to life and expenses are borne by the insurance claim proceeds.

Security against loans – The whole life insurance policy can be used as a security against loans taken from banks and financial institutions.

Payouts – There are payouts offered on various risk factors.

  • Payout on maturity – A term policy will not yield any benefits unless the risk takes place. However, the whole life insurance payout will ensure that payments will be made on maturity. The sum assured and bonus will be paid to the policyholder after reaching 20 or more years as per the plan. The proceeds will help the policy holder in living a dignified life.
  • Payout on death – If the policyholder dies, the sum assured and the bonus will be paid to the nominee.
  • Payout on surrender – As you surrender the policy to the insurance company, the insurance company will assess the surrender value of the policy and the money will be paid to the policyholder. The policy contract will be terminated earlier by the policyholder. The insurance company will assess the eligibility of the policy and the guaranteed surrendered value is based on the number of years the policy is in force. The guaranteed surrender value will be 2 or 3 years as per the plan. As soon as the payout was done, the policy will terminate.
  • Payout against loans – The policy will be eligible for payout against loans after attaining the surrender value. However, you should be aware of the terms and conditions of the policy so that you can offer the policy as a security against loans. The policy holder should be above 18 years old and the outstanding amount should not be above the surrender value of the insurance policy.
  • Payout after attaining 100 years – The insurance company will pay the sum assured and bonuses after the policyholder attains 100 years. It is very rare to live 100 years in India and the payout will be done by the insurance company as per the terms and conditions.

Why whole life insurance policy?

Whole life insurance policy offers many dividends. If there is risk of death, the sum insured plus dividends will be paid by the insurance company to the beneficiary. The beneficiary will be the blood relation (in most of the cases). The family members who are dependent on the earnings of the head of the family will manage their expenses very easily through the financial bail-out.

The subscription towards whole life insurance policy can be paid in a single installment or on annual basis. The premium can be paid on monthly basis, quarterly basis, and semi-annual basis as well. The policy will be in force even after the completion of the policy premium period as mentioned in the contract.

Whole life insurance payout calculator can be used to choose the most appropriate plan as per your earnings. You will commit a sum of money during the earning stage and the insurance cover is applicable throughout the life.

The earnings will decrease and the expenses will increase as you age. If you buy a whole life plan, you can use the lump sum and the bonus to meet various kinds of expenses in a very efficient manner. If you have children and special needs, they can be realized by subscribing to the policy.


The whole life insurance cover as the name implies will offer insurance against life and the cover will remain throughout the life. Your monthly savings in terms of premium will be exempted from the income tax. You should buy the best insurance policy after comparing the features offered by various insurance companies. A person or group of persons who are mentioned as beneficiaries will be benefited by the policy.