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Term insurance and whole life insurance are two common types of life insurance. Whole life insurance is a type of insurance that offers long life protection. It also has a cash value component that helps you to borrow money from the plan when needed. On the other hand, term term insurance gives you coverage for a set period. The nominee receives the plan benefit in case of your death types that aim at offering protection to the loved ones of the policyholders during unforeseen situations, such as illnesses or worse, death. Let’s understand the difference between term insurance and whole life insurance in this article.
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Term insurance is the most affordable and convenient type of life insurance that only offers death benefit to the nominees of the policyholder after his/her unfortunate death. And if you survive/outlive the policy term, the insurance ends and there's no payout. Let’s understand this with the help of an example:
Sunil, a 32 year old non-smoking man, buys a term plan from Policybazaar to financially secure his family. He earns Rs. 12 Lakhs per annum and therefore, chooses a life cover of Rs. 1 Crore for a policy term of 30 years. He now pays a monthly premium of Rs. 1,143 and will continue paying it for another 30 years.
Term Plans
Whole Life Insurance is a kind of life insurance that provides coverage for the entire lifetime of the policyholder, i.e. for 99 or 100 years. It guarantees a death benefit to be paid to the nominees/beneficiaries upon the policyholder's death. This type of insurance offers lifelong protection and a savings element, making it suitable for long-term financial planning. Let’s understand this with the help of an example:
Sanjay, a 31 year old non-smoking man, buys a term plan from Policybazaar to financially secure his family. He earns Rs. 10 Lakhs per annum and therefore, chooses a life cover of Rs. 1 Crore for a policy term of 99 years. He now pays a monthly premium of Rs. 2,311 and will continue paying it until he is 99 years old or eventually dies during the policy term. This will ensure that he has secured his loved ones for a longer period of time.
Below mentioned parameters help to evaluate which life insurance plan is right for you as per your requirements:
| Parameters | Term Insurance | Whole Life Insurance |
| Premiums | The premium amount of a term insurance plan is comparatively lower than the whole life insurance plan | Premium amount remains constant throughout the tenure of a whole life insurance policy, unlike term insurance plans where they might get an increase at the renewal time. |
| Tenure | A term insurance plan generally has certain policy tenure to avail plan benefits | Flexible tenures are offered till the life assured is 100 years. In this, the survival or maturity benefits are paid out once the life assured completes 100 years. |
| Cash Value | In a term insurance plan, the amount of loan is subtracted from the SA as the insurance company accrues interest. | Premiums paid by the policyholder for a whole life insurance plan doubles up as an investment. An insurer can announce a bonus in case it makes proceeds and provides you a loan at viable rates of interest. Whole life policies allow you to invest savings while offering protection from future uncertainties. |
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
Note: It is suggested to calculate the term plan premium on the term insurance calculator online tool by Policybazaar before buying.
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You can choose between Term Insurance and Whole Life Insurance keeping in mind the following conditions:
| Term Insurance | Whole Life Insurance |
| You want affordable coverage for a specific period, like when you have a mortgage or dependents. | You want lifelong coverage and guaranteed death benefit for your entire life. |
| You need a higher death benefit for a lower premium cost. | You value the cash value component, which grows over time and can be used for emergencies or opportunities. |
| You want simplicity and don't need a savings or investment component. | You want a policy that can serve as part of your estate planning or inheritance for beneficiaries. |
| You have other investments or savings for long-term financial goals. | You are comfortable paying higher premiums for the added benefits and lifelong coverage. |
| You prefer to invest and save money independently. | You want a policy that offers more flexibility in accessing funds later in life. |
Below are the steps to buy Term Insurance Plan or Whole Life Insurance Plan from Policybazaar:
Step 1: Go to Policybazaar's term insurance page.
Step 2: Enter your name, gender, mobile number, and date of birth.
Step 3: Provide details about your annual income, occupation, education, and smoking habits.
Step 4: If you want to buy whole life insurance, choose the appropriate age (99 or 100 years) in the Policy Term option.
Step 5: Look at the available plans and choose the one that fits your needs best.
Step 6: Buy using your preferred payment method
Note: Know what is term insurance first and then buy a term plan for your loved ones.
When selecting between term insurance and whole life insurance, it's essential to consider your specific financial situation, future goals, and assess debts and loans. Therefore, it is advisable to precisely understand both types of insurance and also keep in mind your age and the purpose of purchasing the insurance. The decision ultimately depends on your long-term financial objectives, whether you prioritize lifelong coverage and the potential for building cash value or are content with temporary coverage at a more affordable cost. You can compare from among 15+ insurance companies in Policybazaar to make an informed decision on which plan to opt for.
Note: Check out the best term insurance plan in India and choose one that suits your requirements.
Note: You should also check the benefits of term life insurance if you are planning to purchase the term insurance plan.
˜Top 5 plans based on annualized premium for bookings made on https://www.policybazaar.com in the first 6 months of FY 24-25.
Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
+Rs. 487/month (Rs.16/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited
We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881
For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale
Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.
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+Rs. 820/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
+Rs. 1,443/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
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