Term Insurance and Whole Life Insurance – Both policies have different benefits. It depends on you whether you want more protection at a lower premium or savings with lifetime coverage. Know which insurance plan will be best for your budget, needs and family.
In today’s times, taking life insurance is not only wise but also a necessity. But when there are two options in front of you – term insurance and whole life insurance – then it can be a little tricky to understand. One plan is cheaper, but comes with a time limit. The other one lasts for a lifetime, but is a little heavy on the pocket.
In a country like India, where family safety comes first, choosing the right insurance is not just a financial decision but also a way of showing concern for your loved ones. So let’s understand these two plans so that you can make an informed decision without any confusion.
What is Term Insurance?
Term insurance can be thought of as renting a house. In this, you get cover for a fixed period – say 10, 20 or 30 years. If you die due to any reason during this period, your family will get a fixed amount (Sum Assured). The premium is low, which means less money has to be paid every month or year. There is no saving or money back facility in this (unless you take the return of premium version). If you survive the insurance term, usually no money is received.
Who is it right for?
Term insurance is good for those who have a limited budget and want more coverage at a lower premium – such as for home loan, children’s education, etc.
What is whole life insurance?
You can consider whole life insurance as buying your own house. In this, you get lifetime coverage. As long as you are alive or as long as the policy is active. The premium is higher than term insurance. A cash value is also created in it, that is, the policy has a savings-like value. You can also take a loan against this cash value.
Who is it right for?
If you want your policy to cover you for life and also create savings or value, then this plan can be better for you. But keep in mind, for this you should have the ability to pay premium regularly and for a long time.
Which insurance is better for whom?
If you want to pay a low premium, then choose a term plan. If you can pay a higher premium and also want savings in the long term, then whole life is better.
Do consult an expert
How much cover will be right for you depends on your income, expenses, family members and future needs. Talk to a trusted financial advisor or insurance expert who can help you choose a plan according to your exact needs.
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