Insurance is very significant in life and it helps live without worries because the risks are shifted to the Insurance Company which safeguards you. Losing a loved one can be devastating but the financial burden or responsibilities can be shifted to the company which will help you deal with the loss. Term or whole life insurance plans are two variants of the same.
https://baohiemxangdau.net/bao-hiem-chay-no-nha-may-san-xuat-khoa-keo.html But before buying any plan, one must have a clear understanding about what is i.e. term and whole life.
Whole Life Insurance
This plan is more like an investment plan. It provides death benefits as well as income benefit throughout the life. The policyholder can withdraw or borrow amount against the policy at any time. The maturity for this plan is 100 years.
Term Life Insurance
Term insurance is for a specific period of time. It is the cheapest form of insurance which provides coverage and protects the family from any financial burden arising due to untimely or unforeseen death of the policyholder. Though, there are no benefits if the policyholder survives and surpasses the maturity date of the policy.
Difference between Term and Whole Life Insurance:
Lets understand the difference between the two policies to help you decide between term vs whole life insurance:
Premium: Term life insurance premiums are lower than whole life insurance. In whole life, the premiums remain constant but in term plan, the premium increase with time.
Tenure: Term plan is for a specific time but the maturity date of Whole life insurance is 100 years.
Investment: Whole life insurance premiums are invested in your protection fund and you can also borrow amount against your policy but term life insurance does not have that option.
If you are in your 20s-30s, is the best suited option because these plans have been designed for highest benefits in the short term. They provide protection at reasonable premium rates.
But if the age is 40+, then you should pt for whole life insurance because it provides death benefits and also helps you invest which can be beneficial and inherited by the future generation.
When it comes to selecting a term plan, one must assess all the factors involved i.e. health, income, liabilities etc.
Here are some steps to have a clear understanding of how to select term insurance:
Human Life Value: Human life value is a person’s income or salary plus the liabilities like loans etc. The insurance must cover the policyholder or insured person’s human life value and provide cover in the case of death.
Cost: Although we have heard that this plan is the cheapest but you have to compare the plans provided by various companies and see which one provides highest benefits at lowest premiums.
Reliability: Before buying the insurance, check the reputation of the insurance company. Term insurance is a long term investment so check the company’s FICO score would be a good way to gauge its stability and reliability.
Claim Settlement Ratio: Every year, the IRDA publishes the claims settlement ratio for all companies. Check the claim settlement ratio of the companies, which is, the cases settled by them.
Riders/ Add Ons: Companies provide additional benefits and riders along with the policy. Check for the insurance company which provides highest range of riders.
Terms and Conditions: Thoroughly go through and understand the terms and condition of the policy to avoid any problem while making a claim.