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Whole life and term life insurance – Choose the best fit for you
by Jessy Jose An Insurance AdvisorLife insurance plans are your security
blanket for the future, in case something were to happen to you, they make sure
that family is taken care of financially. Your life insurance plans can help
fund your children’s education, help clear your debts and basically help your
family get back on their feet in your absence.
When buying a life insurance policy one has many choices to choose from. The
main contenders though are usually term life insurance and whole life insurance
policies. Term insurance is insurance that is valid for a
specific period of time and offers death benefit to the nominee in the event of
the death of the insured. The premium for term insurance is low and is often
the only factor that drives people to opt for term insurance. Whole life
insurance on the other hand is exactly as the name suggests insurance that
covers you throughout your life. Premium for this type of life insurance is
higher than that in term life insurance. There is death benefit that is
exempted from any taxes.
So which one is better for
you? The answer lies in the following analysis.
Term life insurance is the simplest
type of insurance. Here, your family is assured a pre-decided amount in case of
a death, if it takes place within the term of the insurance. If the policy
holder survives the term of the insurance, the insurer does not have to pay
anyone. The lure of this type of insurance is the low premium.
Whole life insurance or permanent life
insurance provides cover for the entire life of the policy holder or for a
hundred years whichever’s earlier. In addition to that, the policy also
calculates a bonus on the amount assured, which it then pays to a nominee after
the death of the policy holder.
So what should you choose? It largely depends
on your age and life situation. If you’re in your 20s or 30s and are just
starting out in life, then term plans are right for you. These plans will offer
you decent protection for reasonable premium payments.
If you have a family to look after then you
should for a mix of whole life insurance and term life insurance. You can do
this by buying a term rider on top of the whole life policy.
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About Jessy Jose 
An Insurance Advisor
36 connections, 0 recommendations, 128 honor points.Joined APSense since, July 28th, 2016, From Mumbai, India.
Created on Oct 30th 2017 08:18. Viewed 1,204 times.
