Confused between Term Insurance and Life Insurance? Know the difference before buying a life cover

financialexpress.com:

Insurance plays a crucial role in securing the financial future of you and your loved ones. However, while taking a life cover, it becomes important to make sure that you know the difference between life insurance and term insurance so that you can get full advantages of the product you are purchasing.

In fact, the distinction between term insurance and life insurance is often confusing. Let’s understand the differences between these two popular insurance products in India, enabling readers to make the right decision when choosing the coverage for their specific needs.

Term insurance is a type of insurance policy that provides coverage for a specific term or duration, typically ranging from 5 to 30 years. It offers pure protection without any investment component. In the event of the insured’s untimely demise during the policy term, the beneficiaries receive a predetermined sum assured. Term insurance policies do not have any cash value or savings component, making them more affordable compared to other types of life insurance plans.

Also Read: When can you apply for a loan again after you have defaulted on a previous loan?

Life insurance, on the other hand, encompasses various types of policies that provide both protection and investment benefits. These policies combine life coverage with a savings or investment component, allowing policyholders to accumulate wealth over time. Life insurance policies may include endowment plans, whole life plans, money-back policies, or unit-linked insurance plans (ULIPs). They provide a death benefit as well as a maturity benefit, which is payable if the insured survives the policy term.

Adhil Shetty, CEO, Bankbazaar.com, says, “Understanding the difference between term insurance