To know the difference between term life insurance and whole life insurance, the first thing that you need to know is, “what is life insurance?”. Life insurance refers to the contract between an insurance company and a person. Here, the insurance company can be called the insurer and the person can be called the insurance policyholder. The insurer promises to pay a sum of money in exchange of premium when the event of the death of an insured person occurs. In Roads is a popular site that talks about insurances in detail. To know more about life insurance, you can Check it Out
What is term life insurance?
Term life insurance is also called term assurance. The Term life insurance promises coverage at a fixed payment rate and for a limited period. If that period expires, coverage that was guaranteed at previous rate would no longer be available. The person will need to renew the term life insurance or the term assurance. Term life insurance is not very expensive. If the term life insurance is for one year, then the person will be benefitted only if he or she dies within that one year term. The premium that is paid in term life insurance it is paid by the probability of the insured dying in that particular mentioned year.
What is whole life insurance?
Whole life insurance is also called the whole of life assurance. As the name suggests, the entire life insurance is the insurance policy that is guaranteed to be in continuation for the whole life of the insured person. The insured person needs to keep paying the premium from time to time at fixed intervals and at the fixed rates as stated by the insurance company or the assurer. Payment of the dividend is made up to the set time limit. Whole life insurance is a part of the cash value category of life insurance. Full life insurance cannot be considered cheap or inexpensive. Comprehensive life insurance is for the lifetime so, and it is indeed very reliable.
Different types of life insurance
There are different types of life insurance, two of them being the Term life insurance and Whole life insurance. There are several other life insurances like Unit linked insurance plan, Endowment plan, Money back plan, Child’s plan and Retirement plan. All the mentioned life insurances are different from each other. Some have the cash value while the others do not have. The various life insurances are for different purposes. They have their benefits and drawbacks depending on the policy they offer. Some of the life insurances are cheaper than the others. But in general, we consider two insurance plans being the most important names, the Term life insurance and the Whole life insurance.
Before purchasing any life insurance, a person should keep in his mind some crucial points. The terms and conditions of the life insurance should be read carefully. All the different types of insurance policies and their pro and cons should be found out. Proper research on life insurance should be done, and only then a person should buy the suitable life insurance.