As a financial advisor, I came across this question allot that – “which is better whole life insurance vs term insurance?”
first of all the question in itself is wrong, But how?
Every insurance plan is designed for a specific segment to fulfill the desired goal. Both term and whole life insurance are good as they are designed individually to achieve a specific goal/objective and the comparison between them is good when you know your goal like why you considering the purchase of any of this insurance.
So first of all understand your own insurance goal why you want any of this insurance whether it is term insurance or whole life insurance.
and after understanding your goal see what is the meaning of each of these insurance and what goal they fulfill of the insured person.
Let us understand each of this insurance and see for what purpose they are designed for –
What is term insurance?
Term insurance is a type of life insurance under which the insurance company provides high-risk coverage to the insured person at a very low cost of the premium and no maturity benefit is given under this type of insurance.
for what purpose they are suitable for –
- They are suitable for a person who wants high-risk coverage without any worry about the rate of return and wants to leave a good amount of money for his family on his death.
- term insurance is suitable for those too who are low on budget as the premium of term insurance is very low and budget-friendly.
For more information on term insurance read our latest blog –
What is whole life insurance?
The whole life insurance policy provides the risk coverage to the insured person till his death along with death benefit, it also gives financial assistance to the person after the end of the premium payment term. The maturity benefit is given under whole life insurance as in many policies the coverage is till the age of 100 years and that person lives till 100 the maturity is given to him.
for what purpose whole life insurance is suitable –
- If you want financial assistance after a particular period of time then you can take the whole life insurance policy.
- If you want the benefit of maturity in case of survival then also you can opt for the whole life insurance.
Some major differences between term and whole life insurance are –
- The premium of the term is lower as compared to the whole life.
- Maturity benefit is given in whole life on survival and in the term, no maturity benefit is given only death benefit is given.
If you have met an insurance agent and that agent is constantly telling you that this one is a good policy it has this and that benefit then simply study on your own and see how it will solve your issue/problem keeping aside the features it has in it.
This will give you clarity of thought and you will make a good decision.
Or just fill up the form given below we will reach out to you and will educate you about the insurance policies available in the market without any biased opinion.