Term Insurance VS Whole Life Insurance

Insurance is a very basic financial tool that is a must for everyone. It helps the individual and the family with financial support at the time of the need. Insurance can be of many different types like Vehicle Insurance, Term Insurance, and Life Insurance, etc. In this article, we will discuss the differences between the term insurance and whole Life Insurance and what should you buy according to your financial goal and requirement

What is Term Insurance?

Term Insurance is an insurance product that is sometimes referred as a pure insurance product which means that for a very nominal fee the Sum assured is high as compared to the other type of policy but there is no maturity or survival benefit. In this policy, the policyholder will pay the premium for a fixed tenure and any use of this kind of insurance is applicable at the time of death of the policyholder. The benefit of availing this insurance is that this insurance provides high Sum assured if the policyholder demises during the policy period.

What is Whole Life Insurance?

Whole Life Insurance is an insurance product that provides the insurer with all the benefit of the insurance product. These insurance products are designed in such a way that the insurer gets all kind of benefits like death benefit, maturity benefit, bonus and much more. The Sum assured in this product is comparatively less than the term insurance.

What to Choose Term Insurance or Whole Life Insurance?

There are a lot of options to choose from for securing your life using any insurance but the maximum benefit is the ultimate goal. Life is uncertain and any moment can be fatal for you. Whenever choosing for the Insurance one must review the financial goal and requirement he has regarding the investment. Term Insurance provides financial security to the family when the policyholder demises. This financial help is greater than what Whole Life Insurance offers so as a family head you should be taking the Term Insurance.

For the individual who wants to avail the insurance for the investment purpose should avail the Whole Life Insurance which can help the individual meet his financial goal and at the same time gaining benefit out of the investment.

For Example-

Rahul is the leading member of the family who has term insurance of Rs.1 Crore for which he pays an annual payment of just Rs.7,000/-. If Rahul demises suddenly then the nominee of Rahul gets Rs. 1 Crore as a Sum Assured comparatively a whole Life Insurance annual premium amount will be above 1.60 Lakhs for the same Sum Assured.

It is totally up to you and your financial goal whether to choose a Term Insurance or a Whole Life Insurance. Both the insurance product has benefit as well as drawback so a mix of insurance could be the go to option for you.