Term Insurance Vs Whole Life Insurance

Posted by sammi maheshwari on April 30th, 2018

Term insurance plans differ from whole life insurance plans in quite a few ways. It is essential to understand the differences before buying them from service providers.

What is Term Insurance?

Term insurance is the purest form of protection and the most affordable kind. When life insurance products first became available in India, these were the only possible life insurance in India. Many online life insurance policy provider offers a term life insurance policy with a variety of riders and options to choose. Moreover, in a term insurance policy, the policyholder can avail an extensive corpus at just a small premium per month, making it lucrative to those who wish to secure their families against untoward circumstances, without financial burden.

With a term insurance policy, an individual needs to pay the insurance premium to the company providing the life insurance in India for a fixed and specified duration. When these pure term insurance policies mature, i.e., when the policy term expires, the policyholder is not entitled to any benefits, as is the case with other plans.

The significant advantage of term insurance plans is that while the policy is active, the beneficiaries as notified by the policyholder will receive death benefits in the unfortunate event that the policyholder dies. In this way, a term insurance policy provides much-needed death benefits and can help secure the policy holder’s family.

What is Whole Life Insurance?

Whole life insurance plans are similar to term insurance plans in some aspects. However, with a whole life insurance policy, the individual or policyholder will receive many benefits upon the maturity of the said policy. In addition to these many benefits, the policyholder may also be permitted to borrow money from the insurance corpus in the event that the policyholder faces an emergency and needs to borrow funds. In this case, the policyholder may approach the insurance provider and state his/her claim. A whole life insurance policy also provides suitable insurance cover for the policyholder, and the entire sum assured is provided to the beneficiaries, as notified by the policyholder, in the unfortunate event of the demise of the insured person.

A whole life insurance policy is one of the best options to choose when wanting to save money for the future since the policyholder receives all the money paid towards the policy along with interest when the policy reaches maturity.

Although both plans provide life insurance, the benefits that come from the two plans are significantly different. Thus, it is important to note that choosing a wrong life insurance policy, which may also be online life insurance, from the incorrect life insurance company can significantly affect a person’s security and finances. Therefore, to prevent any inconveniences or untoward incidents that may occur in the future, it is always best to get in touch with a reputed financial advisor to understand which offline or online life insurance policy might be the best for one’s individual needs.

sammi maheshwari

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sammi maheshwari
Joined: July 26th, 2017
Articles Posted: 8

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