Difference Between Term Insurance Plan and Whole Life Insurance

1
Difference Between Term Insurance Plan and Whole
Life Insurance
Search. Compare. Buy
Sourcehttps//www.slideshare.net/rameshsonavne/di
fference-between-term-insurance-plan-and-whole-lif
e-insurance
2
What is a Term Insurance Plan?

• A term insurance plan is a pure protection life
  insurance plan that helps you protect your
  familys financial future at the time of your
  unfortunate demise.
• A pure protection plan does not offer any
  maturity benefit.
• You can enhance the coverage of your term plan
  with riders such as critical illness rider,
  waiver of premium rider, accidental death benefit
  rider and others.

3
What is a Whole Life Insurance Plan?

• This type of life insurance plan provides you
  coverage for 100 years or your whole life,
  whichever is earlier.
• This life insurance policy requires the
  policyholder to pay premiums until his death or
  for a specific term.
• On death of the insured, the beneficiary is paid
  sum assured along with the bonus.
• On survival, the policyholder is eligible to
  receive the sum assured with the accumulated
  bonus.

4
Comparison of Features

• Term Insurance Plan

• Whole Life Insurance

• A term insurance policy offers you coverage for a
  specific period of term.
• A term life insurance policy is cheaper compared
  to whole life insurance.

• A whole life insurance policy offers you lifelong
  insurance coverage.
• A whole life insurance policy gives you the
  benefit of availing a loan.

5

• Term Insurance Plan

• Whole Life Insurance

• Payout is made at the end of the premium payment
  term or policy term.
• A term insurance plan does not provide any
  loyalty additions.

• Death benefit is paid only on the demise of the
  policyholder.
• A whole life insurance policy offers you bonus
  and loyalty additions.

6
Pros of Term Life Insurance

• It is one of the cheapest forms of life insurance
  policies in India.
• It helps your family members pay off all your
  loans and liabilities.
• This type of insurance plan provides you high
  coverage at low premium.
• It provides you with life cover for specific
  period of time i.e. till your childs marriage or
  education.

7
Cons of Term Life Insurance

• It provides coverage only for a specific period
  of time.
• If your policy expires, so will your coverage.
• If you survive the term, then no benefit is paid.

8
Pros of Whole Life Insurance

• This type of life insurance insurers you for
  lifetime i.e. even if you live for 100 years or
  more.
• This type of insurance provides you with bonus
  and sum assured on survival and on death too.

9
Cons of Whole Life Insurance

• The premium for a whole life insurance plan is
  high compared to a term insurance plan.
• Chances of being under insured are high.

10
Which is the Best Plan for you?

• If youre in your 20s or 30s and are unmarried,
  then a term insurance plan is best for you as
  they offer high coverage at low premium.
• If youre 30 and are married then a mix of term
  and whole life is good as it provides you with
  financial protection as well as cash value.
• If youre in the 40s or 50s, then whole life
  insurance is a good option as term plan would be
  much expensive at this age and will not provide
  you coverage till the end.
• Recommended Read Term vs Whole Life Insurance
  Which One You Should Buy?