There are many types of insurance which provide you financial assistance through coverage when needed. Many times people do not understand the difference between life insurance and term insurance and consider them to be the same.
While choosing insurance, people also get confused as to which one should be taken between term insurance or life insurance and which should not be taken.
Let us tell you that life insurance and term insurance policies may look similar. But, there is a lot of difference between these two plans. Let us know how term and life insurance are different from each other and which policy will be more beneficial for you.
What are life insurance and term insurance?
Life insurance guarantees protection to a policy holder for life time. After the death of the policy holder, it provides financial assistance to his family or nominee. In this you can also get maturity benefits, surrender benefits, loyalty addition etc. whereas term insurance is a financial product which gives a fixed amount for a fixed time. It is more affordable and you can buy it for a fixed period. You can also customize it as per your needs.
Difference between life insurance and term insurance
In a term insurance plan, a person gets death benefit only if the insured person dies during the term period. At the same time, a person taking a life insurance policy gets the benefit of death benefit even after the maturity of the policy.
Term insurance plan gives you higher returns at lower premium. If you stop the life insurance plan midway, you get back only the amount that you had deposited as premium. Whereas in a term insurance plan, if you stop paying the premium, you stop getting its benefits and the policy also stops.
Which policy is better for you?
What is better for you between life insurance and term insurance depends on your financial needs. If you want to take a policy for a short period then term insurance can be more beneficial for you. With this you can save a lot in premium amount. At the same time, if you want to take a policy with life time coverage which also provides you cash value, then life insurance can be a better option for you.
