How is Term Insurance different from Life Insurance?

I am planning to buy an life insurance policy of around 25-30 lakhs. I have heard about this new insurance product- term insurance. I wanted to know its benefits and how is it different from life insurance. thank you for your help. I would really appreciate your efforts if you can help me out with this as soon as possible. thanks!

How is Term Insurance different from Life Insurance?
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10 Replies to “How is Term Insurance different from Life Insurance?”

  1. Term insurance is life insurance. There are different products out there based on your needs.. Term insurance can vary from 10, 15, 20, and 30 year terms. There are new products where you can choose your own terms called, select a term. Theres insurance called ROP, insurance that will pay you half of the face value up front if you are permanently disabled or have a life threatening disease. You may want to shop around. Dont get suckered in by what the insurance agent/borker tells you. Remember it is not smart to buy insurance more than 10 times the amount of your annual income.

  2. Term insurance is “pure” insurance coverage… it’s not wrapped in a “savings” or “investment” plan. Whole Life policies are total rip off’s 99% of the time. Buy pure insurance coverage & save money other ways…….. it’s the best way to avoid being screwed by an insurance company. In short, Term Insurance is usually the best insurance. The best term policies will hold the premium at the same price for 25-35 years. There is no “cash value” to these policies. That’s a very good thing.

  3. Life insurance is Life Assurance- basically you are insuring against something that WILL actually happen: You, we, will all die someday. Life insurance is insuring against a possibility: you may or may not die within the term of the insurance. Term insurance is usually bought for investment purposes plus some life cover.

  4. Term insurance is a type of life insurance that gives you coverage for a certain term could be 10 years or 20 years or whatever the insurance company offers. Many term life policies gives you the option of renewing after the term expires, however, will not cover you over a certain age.

    However, there are also term-100 insurance, where the coverage is pretty much for your entire life.

    Whole life insurance is a type of life insurance that gives you coverage for your whole life. There are different features inbedded in a whole life policy. You need to determine what your needs are before you buy a whole life policy. If you think you won’t need life insurance when you’re older, buy term, if you want to leave an estate or want to leave something for your spouse or family, buy whole life.

    Don’t get influenced by people telling you whole life policies are a rip off. These people usually don’t have all their information. They are expensive for a reason.

  5. term is a type of life insurance. there is a set term period of 10-20 years or more, and you pay the premium for those years and then the policy ends. you can renew the coverage at the end of the term period but the premium will increase a ton.

  6. Term insurance is life insurance.

    You have 2 options, basically. Permanent insurance and term insurance.

    Term insurance costs less up front. Its like renting an apartment. You get to choose a time frame from 1 year to 30 years. It’s a good policy if you need lots of coverage now but have little money, like a young family with lots of kids or someone with a mortgage and school loans, etc. It is cheap because it seldom gets paid out because most people live beyond the term of the policy.

    Permanent insurance is there when you will most likely need it because it will never end as long as you keep paying or have paid enough into it that it will sustain itself. It is cheaper in the long run because if you cancel it after 20 years, you get all your money back. Its NOT an investment product, don’t let anyone fool you. But, it isn’t a bad product.

    I sell life insurance. Your best bet, depending on your needs (consider if you want debt paid, income replacement, help with school, etc) is to purchase a combination. Give yourself $50K of permanent insurance (cover burial expenses, final bills, etc) and take out term for the rest of your debt.

  7. Term insurance is a PURE RISK policy. You pay for the risk of dying. If something happens to you , your nominee will get the sum insured. If nothing happens to you , you do not get anything at maturity. This is the cheapest form of LIFE COVER and THE BEST. Most insurance agents do not want to sell such policies to you because the premium is 10 to 12 times cheaper than a traditional endowment or moneyback policy. Reason is that the commission he gets is based on your FIRST PREMIUM.

    You are doing the right thing. Insurance is an expense , not an avenue for investment.

    Visit AEGON RELIGARE website and calculate the premium yourself.

    Have a look at their ONLINE policy , INCREASING COVER policy & CRITICAL ILLNESS RIDERS.

    FOR INVESTMENT , there are better avenues like PPF /SIP IN MUTUAL FUNDS / DIRECT EQUITY

  8. Dear Shantanu

    Term insurance is a form of life insurance. there are two type of term insurance
    1. term insurance without return of purchase price : in this police, there is no maturity value. If there is mis happening happen during the term the claim would be given. Its pure form of insurance
    2. Term insurance with return of purchase price in this police claim would be given if there is any mis happening during the term. If there is no mis happening till end of the term, all premium would be given to life to be insured.
    thanks a lots

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