Whole Life Insurance Plans

Whole Life Insurance Plans

Whole life insurance is available in participating and non-participating form. Find out how each of them work and if they fit your needs.

Key takeaways

  • Whole life policies generally cost more than term insurance as part of the premium is invested to build up cash value.
  • Bonuses projected by participating policies are not guaranteed and may fluctuate.
  • Prepare to commit for the long term. Early termination may result in losses.
  • A non-participating policy only provides guaranteed benefits and it is not entitled to bonuses.
  • If you take a loan from your cash value, it has to be repaid with interest. It will make it harder for your money to grow.

What is whole life insurance?

Whole life insurance provides life-long protection. It is available in different forms, such as participating and non-participating policies.

Participating whole life policies

Participating whole life policies share in the profits of the company’s participating fund. Your share of the profit is paid in the form of bonuses or dividends to your policy.

Bonuses or dividends are not guaranteed as they depend mainly on the investment performance of the participating fund. When you make a claim, bonuses or dividends which have been declared will be paid in addition to the sum assured.

Whole life policies have cash values which will build up after a minimum period, and this differs from product to product.

Non-participating whole life policies

Non-participating whole life policies have guaranteed claims benefits and cash values.

See also: Participating versus non-participating insurance policies

Things to note

  • Before buying a whole life product, ask yourself if you need to provide for your dependants for the rest of your life or until they are financially self-reliant.
  • Buying a life insurance policy is a long-term commitment. Early termination causes you to lose money. Can you afford the premium?

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