Comparison: Life Insurance vs Term Insurance

Every individual should have a thorough knowledge about the different types of insurance plans, so that he/she can make informed decisions. Choosing the right type of insurance plan is very essential to secure the life of self and dependents. It also helps insurers to lead a stress-free life without having to worry about financial woes. Life insurance and term insurance are two major insurance plans, having their own merits and demerits.

What is a Life Insurance Plan?

By buying a life insurance plan, a policyholder entitles themselves to a pre-decided maturity benefit. If the insured survives the term, they can get a specific maturity benefit. In the case of his/her demise, the sum assured will be paid to the nominees. There are different types of life insurance plans such as whole life plans, money-back plans, term insurance plans etc. 

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All About Life Insurance Corporation of India

What is a Term Insurance Plan?

A term insurance plan is a type of life insurance plan which provides life coverage for a fixed term and if the person dies within that term, the sum assured is paid to the nominee/s of the insurer. If the person survives the term, then no claims can be made. Thus, there are no maturity benefits if the insured survives the term. But this plan is very economical to adopt.

Conclusion

Term insurance and life insurance are often used interchangeably, however, it is important to note that the former is a part of the latter. There are a number of types of life insurance policies and one of the most popular of them is a term insurance plan. A term insurance plan offers substantial peace of mind by ensuring financial stability of your loved ones in your absence. Another factor which contributes to the popularity of term plans is their availability at low premium amounts.

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