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| term life insurance |
Term Life Insurance – Insurance is one of the products for self-protection from various kinds of risks that will be faced. There are so many types of products offered from this insurance such as life insurance, health insurance, property insurance, and many more.
Life insurance itself is one of the financial contracts, where if the policy recipient dies, the beneficiary is the family left behind. There are several types such as term life insuranceand whole life. What’s the difference? Here we have prepared for you some of the differences.
Whole Life and Term Life Insurance and Is It Not the Same? What are the Differences?
Insurance is now one of the essential needs that everyone must have, from individuals to families. This insurance helps transfer risk from you to the insurance company of your choice. One of the most popular of the insurance products one of them is life insurance.
What is Term Life Insurance
Term life insurance, or commonly known as life insurance, is insurance that provides coverage for a predetermined period of time. For example, insurance coverage for the next 5 years, or the next 25 years, or until you reach a certain age.
After the policy period ends, you are free to choose to continue the policy period or end your protection there. This term life insurance benefit covers the cost of treatment and hospitalization for a certain period of time at the risk of death, permanent disability or partial disability.
In addition, you will receive a cash value benefit if the risk occurs outside the coverage period. The advantages of term insurance include low premiums, the ability to extend the term when it expires, and the ability to stop when you no longer need it.
Term life insurance also offers optional cash value or cash value benefits and you can combine this insurance with other insurance products such as health insurance and personal accident insurance.
Types Of Term Insurance You Need to Know
There are several types of term insurance products, including:
· Yearly Renewable Term/YRT Insurance
Term insurance with a period of one year can be extended annually by the policyholder up to the age limit. Usually 65-70 years. However, the premium will increase with each update. This increases with the age of the policyholder as the risk increases.
· Level Term Insurance
Term insurance covers a certain period of time in accordance with the coverage period specified in the insurance policy. Therefore, the term of the insurance contract may be one year or more. The policyholder does not need to renew this type of policy.
· Increasing Term Insurance
This insurance protects the policy from inflation as protection increases every year. Therefore, insurance will start with a fixed amount periodically (for example, 5 percent per annum) as long as the policy is still active. Premiums automatically increase as the amount of coverage increases. However, this type of insurance is very rare on the market.
· Decreasing Term Insurance
The reduction of term insurance means that the premium will be deducted during the insurance period. This insurance is usually associated with a credit loan. At the end of the policy period, the benefits you receive will gradually decrease to zero.
What is The Different with Whole Life insurance
Whole life insurance, or commonly known as whole life insurance, is insurance that provides life security protection with a validity period until the end of your life. This insurance is given to you as a policyholder unless you are still active and have not died.
However, this life insurance is subject to the upper age limit for coverage. The maximum age to apply for life insurance is 100 years. This limit is based on a record life expectancy that reaches more than 70 years. All life insurance pays back the amount of premiums and interest paid annually. If you don’t claim it, you won’t lose your premium.
Of course, you can also use it with your family in your own old age. Even if you don’t have this whole life insurance policy and you die, you can rest assured that it will be transferred directly to your family.
The family you leave behind will be covered by the life insurance you have, so they will not have difficulties or bear the financial burden.
Types of Whole life insurance products
Considering the insurance premium, it is expensive, but considering the insurance premium, it is expensive. Here are the types of whole life insurance you should know:
· Straight Life Policy
Direct life insurance is the type of whole life insurance that you can get. Premiums are paid until the insured dies or reaches the age of 100 years. The cash value is formed during the insured lasting or equal to the basic sum insured when he is 100 years old.
· Limited-payment Whole Life Insurance
The next type is limited payment lifetime insurance. This insurance is recommended for those who do not want to pay a lifetime premium, but want to get lifetime protection. This means that the insured can pay premiums for a certain period of time or up to a certain age.
· Non-Participate Life Term Policy
There is also a lifetime life insurance that does not participate. This means that if the insured passes away, the heirs will receive a certain amount of security deposit, but the amount is limited. Also, insurance companies do not include bonus elements.
· Participate Life Term Policy
When choosing the type of whole life insurance, the insured or policyholder has the opportunity to reap the benefits obtained by the insurer on the purchase of additional premiums. This bonus is added annually even if you pay more than the basic premium.
Final Words
So do you already know a little bit about the difference between term life insurance and whole life insurance? Although from the same product, namely life insurance, but of course these 2 types of insurance offer different benefits.
Hopefully, the information above can help those of you who are confused about determining the life insurance product to be chosen. That’s all thanks.
