Whole Life Insurance And Term Life Insurance Policy Comparison

Honestly speaking there is no comparison between the term insurance policy and the whole life insurance policy. However, as both of these are life insurance policies hence term life insurance and whole life insurance comparison is quite obvious. The best way of putting this across the table is by stating the difference between the two rather than taking it as term life insurance and whole life insurance comparison. Following would be the point of distinction between the two : -

• Term life insurance is only for a stipulated period of time where as the whole life insurance is for the life long which is restricted to 100 years. In case, you have the whole life insurance policy and you are standing in the 100th year if your life then, the policy amount would be payable to you in your 100th birthday.

• Term insurance would not give you any cash value. Where as whole life insurance policy would extent cash value. Cash value is the amount that the insurance company pays to the policy holder which it earns form investing a portion of premium that the policy holder pays. This could be at a minimum fixed rate of return or the policy purchased could have the interest sensitive clause as well.

• The whole life insurance policy could be for really high amount where as the term life insurance policy amount could be really low.

The above mentioned points for the term life insurance and whole life insurance comparison are not exhaustive. The choice of a particular insurance policy would be specific to the needs of a particular individual. There are some people who advocate that the whole life insurance policy is a better way of investing and as well as getting an insurance cover for life. However, this is partially true as the rate of return being the minimum fixed one or the interest sensitive one would be quite low as compared to the other investment tools.