Difference between term insurance and whole life insurance

1. Difference Between Term Insurance Plan and Whole Life Insurance Search. Compare. Buy

2. A term insurance plan is a pure protection life insurance plan that helps you protect your family’s financial future at the time of your unfortunate demise. • A pure protection plan does not offer any maturity benefit. • You can enhance the coverage of your term plan with riders such as critical illness rider, waiver of premium rider, accidental death benefit rider and others. What is a Term Insurance Plan?

3. This type of life insurance plan provides you coverage for 100 years or your whole life, whichever is earlier. • This life insurance policy requires the policyholder to pay premiums until his death or for a specific term. • On death of the insured, the beneficiary is paid sum assured along with the bonus. • On survival, the policyholder is eligible to receive the sum assured with the accumulated bonus. What is a Whole Life Insurance Plan?

4. Term Insurance Plan Whole Life Insurance A whole life insurance policy offers you lifelong insurance coverage. A whole life insurance policy gives you the benefit of availing a loan. Comparison of Features • A term insurance policy offers you coverage for a specific period of term. • A term life insurance policy is cheaper compared to whole life insurance.

5. Term Insurance Plan Whole Life Insurance Death benefit is paid only on the demise of the policyholder. A whole life insurance policy offers you bonus and loyalty additions. • Payoutis made at the end of the premium payment term or policy term. • A term insurance plan does not provide any loyalty additions.

6. It is one of the cheapest forms of life insurance policies in India. • It helps your family members pay off all your loans and liabilities. • This type of insurance plan provides you high coverage at low premium. • It provides you with life cover for specific period of time i.e. till your child’s marriage or education. Pros of Term Life Insurance

7. It provides coverage only for a specific period of time. • If your policy expires, so will your coverage. • If you survive the term, then no benefit is paid. Cons of Term Life Insurance

8. This type of life insurance insurers you for lifetime i.e. even if you live for 100 years or more. • This type of insurance provides you with bonus and sum assured on survival and on death too. Pros of Whole Life Insurance

9. The premium for a whole life insurance plan is high compared to a term insurance plan. • Chances of being under insured are high. Cons of Whole Life Insurance

10. If you’re in your 20s or 30s and are unmarried, then a term insurance plan is best for you as they offer high coverage at low premium. • If you’re 30 and are married then a mix of term and whole life is good as it provides you with financial protection as well as cash value. • If you’re in the 40s or 50s, then whole life insurance is a good option as term plan would be much expensive at this age and will not provide you coverage till the end. • Recommended Read: Term vs Whole Life Insurance: Which One You Should Buy? Which is the Best Plan for you?