Tax Finance Info: Life Insurance Policy

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Comparison: Term Insurance V/s Life Insurance Policy</h3>
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<span lang="EN-US">Let us
start with defining both the terms which will give us a basic understanding for
the comparison.<o:p></o:p></span></div>
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<b><span lang="EN-US">Term Insurance</span></b><span lang="EN-US">: Term Insurance is a
life insurance, which provides coverage at a fixed rate of payments for a
limited period of time.<o:p></o:p></span></div>
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<b><span lang="EN-US">Whole Life Insurance</span></b><span lang="EN-US">: While in case of
Whole Life Insurance, the Whole Life Insurance is a life insurance policy that
remains in force for the insured’s whole life and requires premiums to be paid
every year into the policy.<o:p></o:p></span></div>
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<b><span lang="EN-US">Let us see other points of
difference between Term Insurance and Whole Life Insurance:<o:p></o:p></span></b></div>
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</span></span><span lang="EN-US">Term Insurance is for a specific term while Whole Life
Insurance is for the whole life; as the name suggests.<o:p></o:p></span></div>
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</span></span><span lang="EN-US">Before buying Term Insurance or Whole Life Insurance, the
age of the policy buyer should be kept in mind. If you are younger in age, you
can buy Term Insurance which will give you a cover for a specific term. While
once you have became of an older age or nearer to that you should opt for Whole
Life Insurance.<o:p></o:p></span></div>
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</span></span><span lang="EN-US">Compare surrender value provided by both Term Insurance and
Whole Life Insurance, and choose the one providing the higher surrender value
whenever you require withdrawing the same.<o:p></o:p></span></div>
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</span></span><span lang="EN-US">Keep the liquidity concept in mind while selecting Term
Insurance or Whole Life Insurance. Term Insurance attracts less of your money
as compared to Whole Life Insurance, but if you want a Whole Life Insurance
cover, scan the market and get the cheapest policy that will not hinder your
liquidity.<o:p></o:p></span></div>
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</span></span><span lang="EN-US">In case of Whole Insurance Policy, you have to choose the
insurance company that is long lasting, with sound financial capabilities and best
reviews since last 10 years as you pay for cover of whole life that may extend
to many years. While in the case of term Insurance, you do not have to consider
such matters as you get the cover for a specific period.<o:p></o:p></span></div>
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</span></span><span lang="EN-US">A Whole Life Insurance cover extends upto 100 years or your
life span, while the Term Insurance is for a specific period.<o:p></o:p></span></div>
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</span></span><span lang="EN-US">A whole life insurance also serves as an investment, as the
amount from premium which exceeds the amount that goes for the life insurance,
is transferred to savings. In case when the policy matures before the death of
a person, he receives the maturity value. While in case of term Insurance no
maturity benefit are available. That means you cannot receive any money paid by
you as a premium after the term of insurance expires.<o:p></o:p></span></div>
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</span></span><span lang="EN-US">Let us understand the above with the help of an example: For
example X gets a term cover for 7 Years and pay premium Rs.5000 every year with
sum assured Rs.2,00,000. In case the 7 years are over, X will not receive
anything from the insurance company. But if X dies during the period of 7 years
under the cover of term insurance, his legal heirs will receive the sum assured
of Rs. 2,00,000. While in case of Whole Life Insurance the insured gets the
maturity value.<o:p></o:p></span></div>
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</span></span><span lang="EN-US">In case of Whole life Insurance, when a person receives the
maturity value during his life span, the saving part is taxable while if the
same is provided to his legal hires than the same is tax free. While in case of
Term Insurance there are no maturity benefits and so there is no tax.</span></div>
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Comparison: Term Insurance V/s Life Insurance Policy

Comparison: Term Insurance V/s Life Insurance Policy Let us start with defining both the terms which will give us a basic understand...

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