Difference between term insurance and life insurance - which one to choose?

1. Difference between term insurance and life insurance - which one tochoose? Life insurance plans cover the risk of premature loss of human life and provide financial security. Moreover, life insurance policies come in different types and each type of policy aims to fulfil a particular financial goal that you might have. Despite the different types of life insurance plans, many individuals often confuse term life insurance and life insurance to be the same concept and product. This is a mistake. Life insurance and term insuranceare two different concepts which should not be confused to be synonyms. So, let’s understand the main differences between the two and which one to choose– What is lifeinsurance? Life insurance means insurance of human life. Life insurance policies cover the risk of dying too early or living toolong. What is terminsurance? Term insurance is a type of life insurance policy. Thus, life insurance is the main concept and term insurance is a part of a sub-set of that concept. Term insurance plans cover the risk of premature death. In case of death during the policy tenure, the sum assured is paid to help the family deal with the financial loss suffered. Difference between term insurance and lifeinsurance

2. Thus, term insurance and life insurance are two different concepts which should not be confused with eachother. Which one tochoose? The choice between the two basically depends on your requirements. A term life insurance policy is the most basic coverage which you should have for providing financial security to your family even in your absence. Term insurance benefits cannot be ignored and you need a term plan in your financial portfolio. The term insurance premium is low which allows you to make sufficient financial provisions for your family. Other life insurance plans should be chosen based on your coverage needs. If you have a child and you want to create financial security for its future, child plans can be chosen. For retirement, you can opt for annuity plans which promise a steady stream ofincome post-retirement. So, choose a life insurance plan based on your needs but a term insurance plan should not beavoided. Understand the basic differences between term insurance and life insurance and make an informed choice when you buy a life insurancepolicy.