Life insurance plans provide financial security to the policyholder’s family in the case of sudden demise of the policyholder. Term insurance plans, on the one hand, are a type of life insurance. While term insurance policies provide life cover for a particular term--ranging from 10 years to 30 years, or more--life insurance policies generally provide coverage for your whole lifetime.
Also Read - What is Term Insurance?
Both term insurance and life insurance plans have their own advantages, and it can not be said with absolute certainty that either of them is the best. If you are looking for the best life insurance policy, then you have to consider your financial requirements and life goals. You must consider different variables like your present age, earning capacity, number of dependent family members, tenure of the policy, existing health conditions and amount of coverage before selecting the best life insurance policy. Here is a look at the advantages of both the plans.
Advantages of term insurance plans: The advantages are as follows:
Cheap premium payment: The premium payment for a term insurance plan is cheaper as compared to life insurance plans. This ensures that you can provide financial security to family-members in the case of an unfortunate eventuality by paying affordable premiums. So even if you do not have a regular source of income, you can stiff afford the premiums for a term policy.
Simple to understand: Term policies are very easy to understand. You just have to pay the requisite premium, and the policy continues. Unlike ULIPs, you do not have to understand the market to invest in various funds.
Advantages of life insurance plans: Life insurance plans have the following benefits
Maturity benefit and saving component: You can receive maturity or survival benefit along with bonus, if any, for surviving the term of the policy. Life insurance plans like endowment plans and money back plans have an in-built saving mechanism, thus allowing you to create wealth. However, certain term insurance plans, such as Canara HSBC Oriental Bank of Commerce’s iSelect Smart360 Term Plan, now also provide maturity benefits to the policyholder.
Provides returns from market instruments: In the case of certain life insurance policies like ULIPs (Unit Linked Insurance Plans), a part of the premium payment is invested in various market funds, depending on your risk appetite and investment horizon, which then provides returns just like an investment plan.
Similarities between both plans: Both term insurance and life insurance plans have many similarities. You can avail tax savings under Section 80C and Section 10D of the Income Tax Act for both the plans. With digitalisation, you can easily avail both the policies online, without the need of making physical visits to the insurance office, or going through cumbersome paperwork. Many insurance companies also provide term insurance plans with return of premiums, where the premium paid, after certain deductions is refunded to the policyholder.
Thus, both term plans and life insurance plans have their own unique advantages. You can select a term insurance plan if you want a pure life protection plan for your loved ones, in the case of any unfortunate eventuality. But, if you want to have an investment corpus along with a life cover, you can consider zeroing in on a whole life insurance policy. Market experts also suggest having a pure life protection plan with a higher sum assured along with investing in a whole life insurance plans. Ultimately, the choice depends on your individual requirements.
If you’d like to go in for a life insurance policy, you can consider,the Invest 4G unit linked life insurance plan from Canara HSBC Oriental Bank of Commerce life insurance, which provides multiple choices to invest your savings along with the benefit of insurance cover. Here, you can select from seven different funds and four portfolio strategies to invest your hard-earned money. The Invest 4 G online plan comes with a wide array of benefits like return of mortality charge on maturity benefit under Life Option, flexibility of switching funds to take advantage of market movements and the option of partial withdrawals to meet unplanned contingencies or emergency situations in your family.
However, if term insurance seems more up your ally, you can go in for Canara HSBC Oriental Bank of Commerce’s iSelect Smart360 Term Plan, which comes with a whole host of benefits such as three different coverage options (level, increasing, decreasing), optional built-in covers (for eg: accidental death benefit, child support benefit) and three different payout options (lumpsum, monthly income or part lump sum/part monthly income).
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