Published By: Business Desk
Last Updated: September 17, 2023, 09:15 IST
Choosing insurance for you can be a really tiring task as you want the policies that give you the maximum benefits and return in case of any unfortunate circumstances. Insurance policies are important as they provide financial safety to you or your properties in case of an unforeseen situation. But a lot of the time people don’t have clarity on which insurance policy to choose and which insurance plan can offer them better cover. People are so confused when it comes to choosing and majorly that happens with two insurance policies- term insurance and life insurance.
Life Insurance is a policy that is valid till the policyholder’s life under just one condition you keep paying the premiums timely. The policy has a cash value amount which can be seen as a savings account that doesn’t just keep the money but also grows it throughout its span. This policy also extends the coverage of the policyholder along with their family.
Term Insurance, on the other hand, is a lot more specified policy that is for a specific period of time and has a fixed value. They come with an assured minimum sum which the company pays you even if there is no claim or coverage issued during its term. It becomes a more affordable plan as it is for a specific period with a cheaper premium which helps you cover but does not ask for additional payments.
Term Insurance and Life Insurance are two policies that a lot of the times look very similar and alike but when noticed closely these policies have a lot of key differences.
Here mentioned are some key differences between the two: –
Benefits in case of the death of policyholders:
As the term insurance only serves you for a specific term, death benefits can only be acquired if the policyholder dies within the term of the policy. Life insurance, on the other hand, will not only provide benefits at the time of policy policyholder’s death but will also give out maturity benefits to the person who was insured.
Cost for Insurance premiums:
Premiums for both insurance policies are quite different. As with term insurance, the premiums are comparatively cheaper whereas for life insurance premiums are generally of higher value as they have no specific term to serve.
Surrender of policy:
In case you want to surrender a policy, it is very easy and simple to do with a term insurance policy at any given moment as compared to life insurance. With term insurance you will just have to stop paying the premiums and the policy will be terminated. Whereas in life insurance, the maturity benefits are offered only when all the premiums are paid timely. In case of surrendering the policy, the policyholder will get the paid premium only after the applicable deductions.