Insurance is a word we all are aware of and we all know what are the Term insurance benefits, Term insurance policy, and term insurance benefit plan. In simple words, the work of insurance is to protect us from financial loss and it works in a form of risk management. Insurance is a contract that insures or gives us financial protection. Now-a-days, people usually ask and show their interest in insurance-related policies, benefits, and plans. Generally, there are main two types of insurance:
- Life Insurance: Life insurance is a kind of insurance that provides you financial support in case of death or disability, but some life insurance policies provide financial support after retirement or a certain period of time. And in other words, life insurance can help you to secure your and your family’s financial security even in your absence. Life insurance is classified into key types:
- Term Insurance policy: Term Insurance is a most basic type of insurance which covers you for a specific period, where your family gets a lump-sum amount in the case of your death.
- Whole Life Insurance: The Whole Life Insurance benefits cover a lifetime, where your family receives a certain sum in the form of money after your death.
- Endowment Policy: The Endowment Policy is like a term insurance policy, it is also valid for a certain period and it works to provide a lump-sum amount to your family in the event of your death.
- Money-back Policy: The Money-back Policy is a kind of sum assured where the policy paid a certain percentage periodically throughout the term as a survival benefit.
- Unit-linked Insurance Plans (ULIPs): The ULIPs are a plan where products double up as investment tools.
- Child Plan: The Children Plan your child’s financial security. In case of your death, children get a lump-sum amount of money.
- Pension Plans: The Pension Plans help you build your retirement fund from where you can get a regular pension amount after retirement. If you die, the family can claim the assured amount.
- General Insurance: General Insurance is a kind of insurance benefit that provides you financial support in any kind of loss but other than death. This General Insurance helps you in financial loss due to liabilities related to your house, car, bike, health, travel, etc. The general insurance company promises to pay you a sum assured to cover damages to your vehicle, medical treatments to cure health problems, losses due to theft or fire, or even financial problems during travel.
Lets, discuss Term Insurance vs Traditional Life Insurance where we already know the Term Insurance is a key type of Life Insurance and the main and basic work of Term Insurance is to provide a lump-sum amount to your family in the case of your death and it provides coverage for a specified number of years it is also known as the term assurance. Now the point is what is the major difference between Term insurance vs traditional Life insurance because we will cover some key points like the Term Insurance benefits, the Term insurance policy/policies, and the Term insurance benefit plan.
Term Insurance vs Traditional Life Insurance
Let us evaluate Term insurance Vs Traditional Life insurance at different parameters like their benefits, plans, etc., and try to understand their differences.
What are Term Insurance policies?
Term insurance is a kind of life insurance that provides coverage at a fixed rate for a limited period, the term insurance is the purest form of life insurance. It provides financial security to your family at the most affordable rates and whatever the benefit amount is paid out to the nominee in case of death of the policyholder during the term policy.
What is Life Insurance?
As discussed above, Life insurance is a contract between the policyholder and insurance company, where the company pays a designated beneficiary to you or your family money in case of his/her death. According to the contract, terminal illness or critical illness conditions can also trigger payment. The Major difference between term insurance and life insurance, is term insurance is a key type of life insurance but still, there is too many difference between life insurance and term insurance plus there are too many points like the term insurance benefits, the term insurance policy/policies, and the term insurance benefit plan.
Major Difference between Term Insurance and Life Insurance
The Major Difference between Term Insurance and Life Insurance will be given below and does it means that the difference between life insurance and term insurance is a major thing but in reality, there is no big deal or difference between life insurance and term insurance policies.
|Term Insurance policies||Life Insurance policies|
|The term insurance policies provide coverage or financial protection for the premature death of the policyholder with the fixed term.||Life insurance is providing coverage on the maturity period of the policy.|
|The range of term insurance policies starts from 10 to 30/45 years.||The range of life insurance starts from 5 to 30 years.|
|In terms of insurance, the premium is low and affordable.||The life insurance premium is higher than the term insurance coverage.|
|The term insurance is only payable or provides financial security only when the policyholder dies till the maturity period of the policy.||In life insurance, you will get benefits in both, if the condition is the policyholder is alive or with his demise on the maturity of the policy.|
Some Common Benefits of Term Insurance and Life Insurance
- In both Term insurance and life insurance the younger the policyholder is the lesser, he pays for premium.
- In both Term insurance and life insurance, the payment can be a one-time, partial, or regular one.
- In both term insurance and life insurance, the policies can be transferable from one holder to another even without having to pay extra.
- In both term insurance and life insurance, the policies can be purchased via the website.
- The process in both term insurance and life insurance is pre-decided by the policyholder as per the plan enrolled with the insurance company.
Term Insurance Benefits
The Term Insurance benefits are as following:
- The term insurance is easy to understand and it is simple to shop around and compare the rates. The Person who wants to do policy just notes three main decisions: Length of term, Coverage amount, and preferred company.
- In terms of insurance benefits, the best thing is that as we know life does not build the value of cash and if we become a policyholder at a younger age it will give benefits to both you and your family.
- In term insurance benefits you will find that there are many options where you can cover last and less one-year term insurance, here most policies come in 10 -, 15 -, 20 – and 30 years terms.
- In term insurance benefits the point is the rates of these are more affordable than the whole life insurance because it offers protection for a predetermined time.
Features of Term Insurance Policy/Policies
- Anyone can buy the term Insurance policy either online or offline.
- The term insurance policy is providing the Return of Premium (ROP) option.
- The term insurance policy is available under all types of term insurance plans.
- The term insurance policies mostly provide coverage against various liabilities like loans, mortgages, and any other type of debt.
- In term insurance policies you can easily claim offline and online processes.
- In term insurance policy you need to maintain the physical paperwork if you are going through an offline process.
- In term insurance policy the Sum Assured in minimum starts with INR 5 Lakhs and the maximum has no limits.
Term Insurance Plans
There is a list provided below in the table of Best Term Insurance Plans in India from top-rated insurance companies.
|Team Plan||Entry Age (Min & Max)||Policy Term (Min-Max)||Accidental Death Benefits||Critical Illness Benefits||Waiver of Premium||Terminal Illness|
|Aditya Birla Sun Life Protectior Plus Plan||18-65 years||5-70 years||Paid||Paid||Paid||Included|
|Aegon Life iTerm Plan||18-65 years||18-65 years||Paid||N/A||Paid||Free|
|Ageas Federal insurance Flexi Term Plan||18-60 years||10-25 years||Paid||N/A||N/A||N/A|
|Aviva LifeShield Advantages Plan||18-55 years||10-30 years||Included||N/A||N/A||N/A|
|Bajaj Allianz eTouch Lumpsum||18-65 years||18-65 years||Paid||Paid||Free||N/A|
|Bharti AXA Term Plan protect||18-65 years||10-75 years||Included||N/A||N/A||N/A|
|Canara HSBC iSelect+ Term Plans||18-65 years||5-62 years||Paid||Paid||Paid||N/A|
|Edelweiss Tokio Life My Term+||18-55 years||10-85 years||Paid||Paid||Paid||N/A|
|Exide Life Smart Term Plan||18-65 years||10-30 years||Paid||Paid||Paid||N/A|
|Future Generali Flexi Online Term Plan||18-55 years||10-65 years||Paid||N/A||N/A||N/A|
|HDFC Life Click 2 Protect 3D Plus||18-65 years||18-65 years||Paid||Paid||N/A||N/A|
|ICICI Prudential iProtect Smart||18-60 years||18-60 years||Paid||N/A||Free||Free|
|IndiaFirst Anytime Plan||18-60 years||5-40 years||N/A||N/A||N/A||N/A|
|Kotak e-Term Plan||18-65 years||5-75 years||Included||Paid||Included||N/A|
|LIC E-Term Plan||18-60 years||18-60 years||N/A||N/A||N/A||N/A|
|Max Life Online Term Plan Plus||18-60 years||18-60 years||Paid||N/A||Included||N/A|
|PNB MetLife Mera Term Plan||18-65 years||18-65 years||Paid||Paid||N/A||N/A|
|Sahara Kavach||18-50 years||10-20 years||N/A||N/A||N/A||N/A|
|SBI Life eShield Plan||18-65 years||18-65 years||Paid||N/A||N/A||N/A|
|SBI Smart Shield||18-60 years||18-60 years||Paid||N/A||Free||Free|
|Shriram Life Cash Back Term Plan||12-50 years||10-25 years||Paid||Paid||N/A||N/A|
|SUD Life Abhay||18-65 years||15-40 years||Paid||N/A||N/A||N/A|
|TATA AIA Maha Raksha Supreme||18-70 years||10-40 years||Paid||N/A||N/A||Included|
The Term Insurance Benefits Plan
The term insurance Benefits plans are as following:
- In term insurance benefits plans you can easily purchase the plans or you can easily cover 25 Lakhs at an affordable premium.
- In term insurance benefits plan we can easily purchase or buy the plans either it is online or offline.
- In term insurance benefits plan the premium payment process is flexible they provide us options on payment like monthly, semi-annual, or annual basis.
- In term insurance benefits plan it provides protections against the liabilities like loans, montages, and any other debts.
- Another best In term insurance benefits plan is that you can easily avail the tax benefits under 80C of the Income-tax, 1961 for a premium paid members.
Who is eligible to buy a Term Insurance Plan?
Firstly, anyone can buy the term insurance plans but there are some considerations also where mostly the term insurance includes young professionals, parents, married couples, and people who want to gain the tax benefits as term insurance plans under section 80C of the Income Act 1961.
Frequently Asked Questions
Q1. What is Insurance?
Ans. In simple words, the work of insurance is to protect us from financial loss and it works in a form of risk management. Insurance is a contract that insures or gives us financial protection.
Q2. What is Life Insurance?
Ans. Life insurance is a contract between an insurance policyholder and an insurer or assurer, where the insurer promises to pay a designated beneficiary to you or your family with a sum of money in case of the death of an insured person.
Q3. What is Term Insurance?
Ans. Term insurance is either we say term assurance is life insurance that provides coverage at a fixed rate of payments for a limited period, the relevant term, or the term insurance is the simplest and purest form of life insurance.
Q4. What is the Major Difference between Term insurance and Life insurance?
Ans. The term insurance provides coverage or financial protection for the premature death of the policyholder with the fixed term, and on other hand, Life insurance is providing coverage on the maturity period of the policy. You can check the difference between life insurance and term insurance mentioned above.
Q5. What are the Common Benefits of Term Insurance and Life Insurance?
Ans. In both Term insurance and life insurance the younger the policyholder is the lesser, he pays for premium. You can see on the above-mentioned topic on Some Common Benefits of Term Insurance and Life Insurance.
Q6. What are the Term Insurance Benefits?
Ans. The term insurance is easy to understand and it is simple to shop around and compare the rates. The Person who wants to do policy just notes three main decisions: Length of term, Coverage amount, and preferred company. And the rest of the benefits you can see above on the Term Insurance Benefits point.
Q7. What is the Term Insurance Benefits Plan?
- In term insurance benefits plan you can easily purchase the plans or you can easily cover 25 Lakhs at an affordable premium.
- In term insurance benefits plans we can easily purchase or buy the plans either online or offline.
- In term insurance benefits plans the premium payment process is flexible; they provide us options on payment like monthly, semi-annual, or annual basis.
- In term insurance benefits plans it provides protections against liabilities like loans, montages, and any other debts.
- Another best In term insurance benefits plan is that you can easily avail the tax benefits under 80C of the Income-tax, 1961 for premium paid members.
Q8. What is the oldest age to buy term insurance?
Ans. Casually, very few companies will provide a policy to past age 85 and some of the companies issue the policy for persons whose age from 75 to 80.
Q9. Who can apply for Term Insurance Plans?
Ans. In general, anyone can apply or buy the Major Difference between Term Insurance and Life Insurance but mostly parents, young professionals, and married couples buy or apply.
Q10. What is the difference between Life insurance and Term insurance policies?
Ans. There is no big difference between life insurance and term insurance policies. The term insurance policies provide the financial protection for the premature death of the policy owner with the fixed term whole Life insurance provides coverage on the maturity period only.