Whole Life Insurance vs Term Life Insurance

Difference Between Whole Life Insurance vs Term Life Insurance

Getting medically insured is the need of an hour these days as people are suffering from a wide range of health issues and sickness due to the worsening of our environment and also living an unhealthy lifestyle adds to the cause. Due to this getting a life insurance or medical insurance for any amount of money or tenure becomes a paramount requirement these days. When you talk about insurance the two major insurance policies that come up and are widely sold in the market these days are whole life insurance and term life insurance. In this whole life insurance vs term life insurance article, we will try and understand the key differences between the two kinds of insurance products and also understand their nature and clauses.

Whole Life Insurance vs Term Life Insurance (Infographics)

Below is the top 4 difference between Whole Life Insurance vs Term Life Insurance

Key Differences Between Whole Life Insurance vs Term Life Insurance

Both life insurance are popular choices in the market; let us discuss some of the major Difference Between Whole Life Insurance vs Term Life Insurance:

• Term insurance is a type of insurance scheme whereas the premium is paid by the insured for a fixed period of time and for a fixed tenure. Whereas, on the other hand in case of life insurance the insured needs to pay money throughout the life of the insured although in some cases the premium is paid on the insurance policy up to a specific period of time
• Under term insurance, there is generally no money is paid out by the insurance company until or unless the insurer passes away also when compared with whole life insurance it has fewer options available as no maturity or survival benefit is provided to the insured. On the other hand, under a whole life insurance policy, the insured has the ability to borrow money from the insurance company at a lower rate of interest, receive a lump sum amount as survival benefit or get maturity benefits
• Under term insurance plan the premium amount which is paid by the insured is generally less when compared to whole life insurance which comes at a high monthly premium. Also, the premium amount of the term insurance depends on the age of the insured the earlier the insured will subscribe to the insurance policy the lesser is the amount of monthly premium paid out. Whereas, under whole life insurance the premium amount is high and also which is mostly because of the ancillary benefits which are provided by the insurance company on the amount insured and policy subscribed
• In the case of whole life insurance, the premiums paid by the insured are invested in the protected fund as well as other investment options which are generally less risky and if the fund earns the profit on the investments they declare a bonus on it which is given to the person who has subscribed to the insurance policy. Whereas in the case of term insurance, it does not have this feature and the premium amount is not invested anywhere

Whole Life Insurance vs Term Life Insurance Comparison Table

Below is the 4 topmost comparison between Whole Life Insurance vs Term Life Insurance

Conclusion

Getting a life insurance policy and which policy is suitable for you depends on a number of factors that is the age of the insurer, number of members in the family and also the financial strength of the person willing to get insured. If the applicant is above the age of 40 years whole life policy is most suitable for the person whereas, a term insurance policy is more suitable for the person who is in early ages of their lives and can give them benefit onto the later years of their lives.

Don’t wait until the loss of your loved ones in life as it is never too late to get insured and never too late to start.

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