Term Insurance & Whole Life Insurance: What Sets Them Apart?

In today's time, buying a life insurance policy has become a necessity more than a personal choice. Purchasing an appropriate policy to protect your family can be a bit confusing, though. Deciding on which is a better choice for you, term insurance or whole life insurance, one needs to check on several different aspects.

On one hand, the major purpose of online term insurance plans is to provide security to the family for a specific time period, whereas, on other hand, a life insurance policy serves two purposes. Firstly, to provide family protection and secondly, it provides a whole life coverage. Apart from these basic differences, term insurance policies, and whole life insurance plans have many more differences.

Deciding on your financial goals and based on the financial needs of your beneficiary, the customer should choose on whole life insurance or term life insurance plans.

Basic Features of Term Insurance

1. Term insurance is a pure life insurance that provides security to the family for a specific period of time.

2. The Term Insurance Policy offers death benefits that are paid to the beneficiary in case of uncertain demise of the policy holder.

3. Term insurance policy is the easiest and the most affordable life insurance to buy.

4. The term plan can be purchased for a specific time frame of 5, 10, 15 or 30 years.

5. With an increasing age of the policy holder, the term plan becomes expensive especially after the age of 50.

6. In case if the insured wants to extend the coverage beyond the term length. Then the term must be renewed.

7. Term insurance plans can be used as an additional temporary coverage along with a permanent life insurance policy.

8. According to one's own choice, a term insurance plans can be converted to a whole life insurance plan.

Basic Features of Whole Life Insurance

1. A whole Life Insurance Plan provides whole life coverage to the insured.

2. these plans provide death benefits as well as investment value that is built during the tenure of the policy.

3. In order to avail the benefits of the policy, the insured must be qualified with a health examination.

4. A Whole Life Insurance plans take 12 -15 years to build up a decent cash value.

5. The return of profit is based on the worth of return on investment.

6. Whole life insurance can be a good choice for state planning.

7. A whole life insurance provides financial protection and coverage to the insured even after the completion of the policy tenure.

8. A portion of accumulated cash can be borrowed or withdrawn during the tenure of the policy.

9. initially the premium paid under whole life insurance plans are much costlier as compared to the term plans, but a whole life insurance plan can potentially save a good amount of money as considered with the number of years of the policy.

The reason why term insurance is pocket-friendly as compared to whole life insurance plans is that it is temporary and has no cash value in most of the cases. On the other hand, the premiums of whole life insurance plans are relatively higher than that of term insurance because these policies offer the lifetime coverage. Moreover, in whole life insurance plans, there is a guaranteed rate of return on the cash value.

Now, considering the features of both term and whole life insurance policies, you can compare and differentiate between both the policies in a more simplified way. Knowing this difference can help you to make an informed choice of finding the best life insurance for you and your family.