Question

1. In what sense does term life insurance resemble renting a house, while whole life insurance bears a resemblance to buying the house?

Answer 1

Answer - In the case of the term life policy , we pay the premium only for the fixed period of time. One the period gets over , or he dies , the amount is paid to the beneficiary. Hence it is just like paying the rent for house every month until you evacuate the house

On the other hand , in case of whole life insurance , the premiums continue till the end of the life. They never stop . After the death of insured , amount is paid to the beneficiary

Hence it is like owning the house in which you pay the installments of loan until you are alive.