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Which is Better Term or Whole Life Insurance?

Which is better term or whole life insurance?

Term life insurance policies provide you insurance cover for a specified tenure. But whole life insurance provides cover till the insured’s death or till he his 100 year of age.

While determining the best policy it is advisable to consider the below pointers:

Policy tenure

Term life insurance is usually for a period of 5, 10, 15, 30, or up to 75 years.
Whole life insurance, the insured is covered until his death or when he/she reaches 100 years of age.

Premium

Term life insurance offer more affordable premium as compared to whole life insurance.
However, the former gets costlier with increasing age of the insured

Dividend

Whole life insurance plans offer dividends throughout the tenure of the policy.
Term life policies, being true protection plans, do not provide any such payouts.

Surrender value:

If you surrender a term plan, your life cover ceases.
However, in case of whole life cover, you can surrender the policy prematurely and still claim the value of the plan as on that day.

If you are a 20-something bachelor, it is advisable to opt for a term plan as it provides attractive premiums and provides pure risk cover.

However, if you are married and have a family to support choose whole life insurance plans as they provide protection as well as investment opportunities.

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