Insurance is a contract between two parties, wherein one party agrees to pay an amount in certain conditions provided the other one deposits some fixed amount regularly.
You have the option to buy different types of life insurance plans for your home, vehicles, and property of any kind, health, life, and more. However, a life insurance policy and health insurance for the whole family are must-haves.
Life insurance is of three principal kinds, term insurance, unit-linked insurance plans, and whole life insurance. You can browse among the various life insurance policy plans and choose among them according to your needs and suitability.
What Is Term Insurance?
Term insurance means that the plan covers financial protection for a definite period.
The policy term is limited and the benefit is paid to the beneficiary if the policyholder dies within that term. It is the most popular kind because of the low premium rates. Term insurance ICICI and plans from other companies provide ‘value for money’.
The term insurance plans do not have any cash value or additional benefits. They do not offer significant returns on the investment. The premium rates differ from company to company and plan to plan. The rates depend on the sum assured, policy term, age, and sometimes, medical conditions.
What is Permanent Life Insurance?
Permanent life insurance plans offer lifelong coverage and allow the insured to build cash tax-free. It also enables people to claim their policy amount during their lifetime. It is an expensive insurance plan due to extended coverage and high policy value. Permanent life insurance is the better option for those who wish to ensure their family members get financial security no matter when they die.
You must buy permanent life insurance if you wish to fund a life insurance firm, want to pass on the financial legacy to your family, desire to make money from the cash value or the investment feature of the plan and to ensure that your loved ones are never out of cash after your demise.
Difference between Term and Permanent Life Insurance
There is always a debate among people, and they are often confused about buying a term plan or a permanent life insurance plan. Here, we have simplified the difference between term life and permanent life plan in the table below:
| Permanent life insurance | Term Life insurance | |
| Cost of the plan | More expensive than a term life plan | Less costly than a permanent life plan |
| Length of the policy | Lifetime | It depends on the plan, such as 20 or 30 years |
| Cash value | Yes, in the majority of cases | No |
| Guaranteed death benefits | Not every time | Yes |
Read more: Term Insurance vs. Whole Life Insurance: What’s The Difference
Eligibility Criteria of Term Insurance
While choosing a life insurance policy, you also must check the eligibility details. Some are available for adults with 65 being the maximum entry age, while others can be bought for children too.
Sometimes, a term insurance or another such policy may lapse if the premium isn’t paid in a stipulated time. Again, there are factors like minimum sum assured and policy terms to be considered. Use all the tools at your disposal to find the best life insurance policy with high returns.
Claims Process of Term Insurance
The best part about buying term insurance or any other life insurance policy these days is the convenience of it all. You can buy online or call up customer care and an agent is sent to your doorstep.
Most of the claiming process can be done online too. With a simple login, several of the company websites give customers a trouble-free service.
Conclusion
Permanent life insurance provides a guaranteed amount on the death of the policyholder. Plans often offer cash value with interest, and the policy remains in the act. This amount is usually tax-free. It also allows you to withdraw the cash value during your life. On the other hand, the term plan is for a limited period and is less expensive. It offers guaranteed death benefits to the policyholder’s family.
