Term and whole life insurance are two major types of policies in India. Each has its unique benefits and features. While choosing the policy best suited to your needs, it is vital to assess the features and consider the cost of the plans. Several calculators, like term insurance calculators, are available online, simplifying the process. This article provides critical information regarding these calculators and how the difference in cost arises.
Term Insurance vs Whole Life Insurance
Term life insurance is a simple form of insurance with options for customisation and provides death benefits to the beneficiary. The sum amount (predetermined death benefit) is paid to the chosen beneficiaries when the policyholder dies. Term insurance has no savings component.
On the other hand, whole life insurance is a life insurance policy that offers coverage for a lifetime of up to 99 years as a standard limit. In addition to the death benefit, it provides cash value growth that can be withdrawn when needed.
Whole Life and Term Insurance Calculator
To understand how much a whole life or term insurance policy might cost and how much coverage you will get, most insurance providers have a whole life or term insurance calculator on their websites. You must follow a few simple steps to assess the essential details.
- Enter Your Information: You must give some basic personal information first. Your age, gender, income, and a few other details are included in this. These will assist in determining the appropriate coverage for you.
- Select Your Coverage: You must choose your insurance coverage amount. The amount of money you decide to leave for your loved ones in the event of your death.
- Choose a Term: Term insurance provides short-term protection for a predetermined duration, such as 10, 20, or 30 years. The duration of the coverage is up to you. Whole life insurance protects your entire life up to 99 years.
- Get Your Outcomes: Once you have input all your information, the calculator will estimate the potential annual premium. You may also see the overall amount of coverage that you would receive.
- Compare and Select: Using this information, you may evaluate various insurance plans and select the one that best fits your requirements and price range.
Whole Life Vs. Term Insurance Costs
There are two main factors to consider when comparing the costs of term life and whole life insurance policy. These are:
- Initial Cost: The initial cost of whole life insurance is slightly higher than term insurance. This is because term insurance is valid for a set period.
- Cash Value Growth: A significant benefit that adds to the cost of whole life insurance is its cash value growth. As a policyholder, you can access this growth through withdrawals or loans. It offers an extra source of income. Term insurance only pays out death benefits and has no associated cash value.
Conclusion
Understanding what each plan costs is essential to make an informed choice between whole life and term insurance. You can use a term or whole life insurance calculator to get an estimate and understand the coverage amount you will receive. It is recommended that you focus on your requirements regarding family and objectives and choose a plan instead of solely focusing on the cost.
