Legacy Protection with Life Insurance Policy

Wealth preservation has gained precedence over asset management in recent times; especially taking into account the economic volatility that is prevalent currently in the global market. This creates a greater emphasis on legacy planning in order to transfer wealth to the next generation.

Life Insurance is mostly viewed as a tool to secure funds for financial obligations or to replace the family’s income and is not generally associated with wealth transference. But, inherently, life insurance is a legacy. You leave behind wealth for the generations to come, so that they are financially secure. And you can do all of this without compromising your current lifestyle. In a way, we can call it ‘legacy protection’.

There are three aspects to legacy planning:

  • Legacy creation
    In order to plan a legacy, first and foremost you should increase it to fund not only the future, but also your current requirements.
  • Succession planning
    As the name suggests, legacy planning involves leaving your wealth to your successors. You will have to decide and plan who will be availing your legacy after you are gone.
  • Equitable wealth distribution
    Make sure to divide your wealth fairly amongst your loved ones to avoid any disruptions in the family.
    You may also want to answer the following questions:
  • How do you want your personal assets and property to be distributed after your death?
  • Have you ensured that the contact details of your legal heirs who you wish should inherit your wealth are updated considering the long term duration involved?
  • Have you maintained a repository of your financial documents, legal instruments and relevant information – passwords, codes, keys etc?

There are numerous life insurance variants in the market, but one of the most suitable for legacy planning is a whole life cover. They may include a unique combination of death benefit, accumulated survival benefits and fixed returns.

How a whole life policy works?

1. Cover throughout your life

A whole life cover stays in force till the life assured reaches 100 years or upon the death of the life assured. Here, the life assured or the nominee will receive a maturity benefit or lump sum benefit, accordingly. This lump sum benefit can be passed on as legacy.

2. Living value

Whole life participating plans tend to include a savings component that accrues overtime, as a bonus amount.

3. Option to take a loan

Many whole life participating plans allow you to avail a loan under the policy, ensuring that you are at a financial advantage while facing an emergency.

4. Legacy bequeathed to spouse and children

With the changing mindset, it is advisable for you and your spouse to take a whole life cover each, which would make sure your children are bequeathed an additional financial resource.


Finally, as we mentioned earlier, life insurance gives you ‘legacy protection’. In many ways, it protects the legacy that you wish to leave for your loved ones, while at the same time makes sure you don’t compromise on your present. It not only protects their financial future, but also makes sure they have enough to leave a legacy of their own.

To know more about whole life insurance plans, contact your nearest HDFC Bank branch.