How wholelife plans can help transfer tax-free wealth to next generation

The policies provide cover till age 90-100 years; if payout comes as death benefit, it will be tax-free in the hands of nominees

Budget 2023 has proposed that starting from April 1, income from insurance policies (other than Ulips) whose premium (or aggregate premium for several policies) exceeds Rs 5 lakh in a year will be taxed at slab rate. Death benefit will remain tax exempt. Many financial experts expect wholelife plans (including those with a premium exceeding Rs 5 lakh) to be sold aggressively in the aftermath of this change.

How do they work?

Wholelife policies combine protection with saving. “They provide cover till age 90 to 100 years provided all the premiums are paid. The premium payment term typically ranges from