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Term vs. Whole Life Insurance: Explain the differences between the two insurances?

Term vs. Whole Life Insurance:

Explain the differences between the two insurances?

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Answer #1

Term life insurance is a pure insurance policy. It pays out the beneficiary only on the event of death of the policyholder. The term life insurance does not have a maturity benefit. If the policyholder survives the term of the policy, no payment is made to the policyholder. Therefore the term life insurance is the cheapest life insurance.

The whole life insurance covers the entire life of the policyholder. A portion of the premium may be invested and the insurance company may payout a bonus. The premium will be higher than that of the term insurance.

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