13 Differences: Term Insurance Vs. Life Insurance

ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Life insurance is a financial instrument which provides death benefit in the form of money to the beneficiary/nominee of the policy holder. Of course, there are many benefits such as creating wealth for children’s education, retirement and others but the main objective of this policy is offering security to the family member.

With multiple types of life insurance policies available in the market, it is always confusing for the first timers to choose the best amongst all. Adding to the confusion are the two terms term and life insurance. Although both have nearly similar objective there are important differences between the two as mentioned in the below table:

FeaturesTerm Insurance/Term PolicyWhole Life Insurance
Protection offered till for what time period?Limited period of timeLife time or till you reach the age of 100 years
Any benefits offered after maturity?NoYes
Are the returns good?No returns offeredReturns are low
Premium AmountLess expensiveExpensive compared to term insurance
Is it an investmentNoYes
Is it linked to market returns?NoYes
Rider option available?YesYes
Any bonus offered?NoYes. Varies for each company.
Surrender ValueNoYes. Depends after how many years policy is surrendered.
Minimum polict term associated?YesYes
Section 80C tax benefitYesYes
Is the premium taxable?NoYes

Types:

The main purpose of any policy is to provide money to the beneficiary in the event of the death of the policy holder. Although there are certain exclusions by every companies. There are many types of life insurance policies in India mentioned below and are offered by various companies:

  1. Term Insurance
  2. Whole Life Insurance
  3. Endowment Policy
  4. Money Back Insurance Policy
  5. Unit Linked Insurance Plans
  6. Retirement Plans
  7. Savings and Investment Plan
  8. Child Insurance Policy

Here are the prominent companies offering life insurance policies in India:

  1. HDFC Life
  2. ICICI Prudential
  3. SBI Life
  4. Life Insurance Corporation of India
  5. Birla Sun Life
  6. Max Life
  7. Future Generali
  8. PNB Metlife
  9. Reliance Life
ShareShare on StumbleUponShare on FacebookTweet about this on TwitterShare on Google+Share on LinkedInEmail this to someonePin on Pinterest

Leave a Reply

Your email address will not be published. Required fields are marked *