Term Insurance VS Whole Life Insurance
If you are thinking about buying life insurance, chances are you would have heard about term and whole life insurance policies. While both are life insurance products that provide financial protection, they vary greatly in their features. Let’s have a look at how term insurance is different from whole life cover.
|Term Insurance||Whole Life Insurance|
|Term||Plans can be availed for fixed term like 10, 20 or 30 years||Plans are active for the whole life of the insured individual - till the individual reaches 99 years of age|
|Premium Rates||Premium rates are low||Premium rates are higher compared to term plans|
|Benefits||Death benefits are paid to the nominees upon death of the policyholder during the policy period. Lately, insurers have introduced term insurance plans with return on premium, where premiums are returned at maturity||Death benefits are paid to the nominees upon death of the policyholder. If the policyholder survives the policy period, s/he stands to receive the survival benefits and maturity benefits|
The term and benefits of whole life insurance depends on the type of plan you choose.
Which life insurance product should I choose?
A number of factors need to be taken into account when you are deciding which life insurance plan to buy. Your age, marital status and number of dependents, among various other factors, must be taken into consideration. If you are 20-something, ideally the best product to buy is whole life insurance. However, if you only want coverage for a limited time period and at the same time want high sum assured then consider going for term life plans. If you are married and have children then it is advisable to look at the whole life plans available in the market. You can use these policies to leave behind an estate for your heirs.