A whole life policy runs as long as the policyholder is alive. As risk is covered for the entire life of the policyholder, therefore, such policies are known as whole life policies. A simple whole life policy requires the insurer to pay regular premiums throughout the life. In a whole life policy, the insured amount and the bonus is payable only to the nominee of the beneficiary upon the death of the policyholder. There is no survival benefit as the policyholder is not entitled to any money during his / her own lifetime.
Whole life policies have a major drawback in the sense that the policyholder is not entitled to any money during his or her own lifetime. Hence such a policy is suitable only in a few, very specific cases. Suppose a person buys a whole life policy for say 25 years at the age of thirty when his children are young and the family needs protection. By the time he is 55 his children may be well settled, no longer truly needing the protection the whole life policy provides. On the other hand, he would probably require the money for himself and his wife for the retired life but this would not be possible since the sum assured is payable only when the policy holder dies.
Who Should Buy Whole Life Policy