Term Insurance or Whole Life Insurance Whats Better For You

Life insurance is the most generic term used when it comes to discussions about insurance. The awareness of life insurance being of different types and having different components to suit different needs is still very low. Due to ignorance, people select very average insurance plans when they can invest their hard earned money in the best life insurance plans.
We would like to help you understand the basic differences between two of the most sought after and simple insurance plans so you can take a well-informed decision.
What Is Term Insurance Plan?
Term insurance plans in India are designed for people, who want an insurance coverage for a specific period of time. This policy comes with a maturity date after which it ceases to exist. The premium charged for such plans is lower compared to other policies, because this plan only provides a death benefit and is a pure life protection plan. If the insured survives beyond the term of the policy, he will not get any maturity benefits, but if he dies when the policy is still in effect, his dependents will be eligible for the death benefits. That does make for a substantial amount of money, which will be tax-free as well. Also, the premiums that the insured pays will also get tax-benefits.
These plans work as an added security umbrella for the insured while they are working. In case they die during their work-years, the insurance coverage can help to pay off debts or be used for taking care of family?s financial needs. One should compare life insurance policies before zeroing down to the plan that can cater to your specific requirements.
What Is Whole Life Insurance?
As the name suggests, whole life insurance provides you cover till you?re alive. It does not have an expiry or a term that will end with your job or after a specific time. Once you buy it and ensure that you?re paying premiums on time, it will last untill your death. Post death, it will give cash benefits to the nominees. Not only that, buyers of this policy are also eligible for dividends and bonus on their policy as well, and the nominees get enhanced cash value owing to it. The best part about such policies is that the premium remains constant throughout the period of the policy.
If, during the course of time, you want to take any loans, you can use this policy as collateral. Or you can also surrender the policy partially or completely for cash. Of course, there will be an interest to be paid for taking loans, but if you pay everything on time, this can be one of the best investment you will make. Owing to such benefits, the premium charged on such policies is higher than term plans as it. Buying is simple as you can compare life insurance policies online and select the plan that fulfills your financial needs.
Which Is Better?
Both the policies are catering to different needs, and it becomes individual choice to decide about which one to buy. Term insurance plans in India are the ones that most people go for when they are looking to safeguard their debts and financial responsibilities when they?re still working. On the other hand, whole life insurance policies might look expensive due to higher premiums and long premium paying term, but they really work in the long run and keep you and your loved ones safe from any financial hardships, with you and without you!
The decision is entirely yours. The only thing you have to ensure is that no matter how much time it takes or money, you have to buy the best life insurance plans.