BANGALORE:  Term plans are often considered to be the most comprehensive and best answer to meet a person’s insurance coverage needs for life.This is mostly true, as term plans are easy, inexpensive and provide a greater level of coverage.

However, the coverage lasts for a limited period and often needs to be renewed afterwards probably at a higher cost. This mostly occurs at times when we have increased financial needs like emergency, retirement or passing on wealth to the next generation.

A solution for managing cash flow during these rare events is life insurance plans. These plans are designed to offer benefits like accumulated survival benefits, death benefits and guarantees and tax advantages.

These plans cost more than pure term plans, but fulfill various financial needs throughout one’s life. As compiled by Business Insider, let us read through the reasons on why we need whole life plans.

Cover for life

Whole life plans cover individuals for a lifespan. This means a higher investment at the beginning but promises a greater savings over the long term.. For example, if you buy a term plan at 25 years of age for 20 years, your insurance cover will end at age 45.  With retirement age increasing, you will have at least 20 more years of income available.

 Although your principal financial aims will be fulfilled, new objectives, such as saving for retirement, will arise. These objectives may be difficult to fulfill at 45 years of age, whereas with a whole life plan taken out at the same age delivers a lump sum payment at 45, when the 20 year premium expires. This amount can then be used to build on retirement savings, plus the coverage continues until you turn 100.

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