A backup plan?
Everyone loves the sound of a backup plan. A plan that keeps you unmoved and unfaced when the inevitable and unforeseen circumstances occur. A plan by which you keep your cool, even when the temperature of daily living gets intense.
That, my dear, is the essence of an insurance policy. Be it on your car; house; or even life itself, it’s a backup plan that can take down the stress level when the going gets tough.
But just as in almost most things in life, there are variances and differences in service delivery as companies try to satisfy the different kinds and levels of needs of prospective customers
In the insurance world, different packages are available to insurance seekers and satisfy their different needs.
The two variances we would be considering briefly are the Term Life and the Whole Life.They all end with life. Shouldn’t they represent the same thing you might ask?
Well, that’s a very smart question but there is a slight difference between these two packages. Let’s look deeply at them both to understand them much better.
Term Life Insurance
Just as the name connotes, it’s an insurance policy that provides coverage for a particular“term” or period which could range from 10, 20, 30 years and above. It can be accessed when the individual dies during the term of the insurance. They do not accumulate any cash value and it is best suitable for those who don’t want to incur any additional savings of any sort. It’s a far cheaper package when compared to the next package to be analysed.
Whole Life Insurance
Just as the name implies, this insurance covers the whole life of the individual till the time of his death. However, this package is only open to those who are faithful in the payment of their premiums. It also possesses the unique feature of being able to withdraw or borrow funds from this package whilst you are alive. In essence, the funds accrued in this package do not necessarily wait for your demise to be accessed. Even before the transition of the individual the funds can be borrowed or withdrawn. It costs far more than the term life package.
With this zoomed-in study of these two different packages, it now begs the question,which of them is most preferable?
Now, the answer to this question is not a one-size-fits-all answer. It’s dependent on some factors. They include:
1. Cost: As was already explained earlier, the term life package is less expensive than the Whole life package. It then depends on the financial capacity of the individual in question.
2. Time Frame: The term life package is more specific in its timing, unlike the whole life which is applied to the whole life of the individual. So the choice of the packages depends on the intent of the policyholder or the insured. Some companies also allow for switching of packages from the time life package to the whole life package. However, terms ad conditions do apply.
3. Do you want a savings component with your policy: The savings component is only available to the whole life policy but not to the term life package.
In essence, the choice of life insurance package to subscribe to is dependent on what the policy seeker is looking for and can get.
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