Before buying an insurance policy, you should know the advantages and disadvantages of these two.
In the time of Corona epidemic, it has become very important to take insurance for the irregularity of life and for the safety of the family in future. Many types of products are available for insurance in the market. Therefore, it is important to know about them before taking the right insurance policy for yourself. If we talk about term insurance and traditional life insurance, then both plans have some advantages and disadvantages. Before buying an insurance policy, you should know the advantages and disadvantages of these two.
The biggest difference between term insurance and traditional life insurance is that of the death benefit. A term insurance benefits a person only when he dies during the term period. Whereas, in a life insurance policy, a person gets both death and maturity benefits. The amount of death benefit available in term insurance plan is more than the maturity benefit available in life insurance.
Most of the people invest in life insurance to take both benefits but at least one term insurance can be taken as it can take more benefit by paying a lower premium.
Coverage and savings
In case of death of a person in term insurance, his family gets a benefit. However, in term insurance, like life insurance, maturity returns are not available.
If the person does not want to pay a higher premium and only wants to cover the death risk, then he can take term insurance. If a person wants to create an investment corpus with life cover, then he can invest in traditional life insurance.
Surrendering a term insurance policy is much easier than life insurance. In the term insurance plan, if the person stops paying the premium, then his benefits will stop getting and the policy will also end. However, in life insurance, the maturity benefit is available only when the person completes the full tenure of the policy.
In life insurance, if the person terminates the policy in the middle of the term, then only he gets the premium amount back and that too with some deductions. Most term insurance policies can also be renewed.
In a life insurance policy, if a person wants more coverage, he has to pay a higher premium. Apart from this, low returns are available in life insurance policies. In comparison, term insurance is more economical and gives more coverage at a lower cost. Term insurance policy is beneficial for those who do not have stable means of earning.