Whole Life Insurance
Whole life insurance plan is a permanent life insurance devised to create wealth and features guaranteed premiums. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against. In this plan the insured pays premium for a limited amount of time and enjoys protection up to the age of 100 years.
The investment in life insurance provides exemptions and deductions under the Income Tax Act 1961 (Act). The insured can avail deduction benefits under 80C. However the life insurance policy should be evaluated on the basis of protection benefits rather than tax exemption benefits.