News, Culture & Society

What is the difference between term insurance and life insurance?

Life insurance is an important factor when we talk about the sense of security and surety. Everyone id advised having life insurance to avoid sufferings in future. Everyone prefers to make the life of the family secure and for that reason, life insurance serves the purpose. You can get your other belongings like home and car insured also but life insurance is considered the most important one. Different companies in the market offer different life insurance schemes.

You can search for all of them, and you can learn more about converting term life insurance even. Life insurance can be of different types which include

  1. Term life insurance
  2. Whole life insurance
  3. Universal life insurance

Term life insurance:

This type of insurance is a short-term contract between the insurance company and the client. This insurance is related to the death claim only due for a certain period of the contract. The beneficiaries are given the claim, but it depends on the factor that if the insured person dies during a certain period of the contract. If the insured person manages to survive this period then he/she has multiple options which include renewing the contract, get whole life insurance and extending the insurance policy. It all depends on the person insured then. This kind of insurance is usually the cheapest kind of insurance and the premiums are low. A person with changing requirements can go for this type of insurance a this is quite affordable too.

Whole life insurance:

Whole life insurance is the kind of contract in which there is no limit of time or the contract. The person gets insured for a lifetime. It serves the purpose of the death claim and there is an aspect of saving associated with this type of insurance. The beneficiary gets the whole death claim with the surety of saving. But in this type of insurance, the premiums are high, and one must pay them on time to get the claim in the end. This is the most common and traditional type of life insurance used across the globe. Although the prices are high the satisfaction and sense of security are also greater in this type of insurance.

How to convert term insurance into life insurance:

As described earlier that the term insurance is the insurance for a certain period, and it expires with the tie of contract. Also, if the person survives the term there is no claim given. So of course, there is a requirement to extend the contract. Hence, the insurance companies give this option to the clients that they can convert the term insurance into life insurance if they feel the need for it. As discussed earlier that the whole life insurance lasts for a lifetime and gives a greater level of sense of security. The clients can investigate many options given by the insurance companies and then they can decide based on their requirements. In this way even if the person was unsure about life insurance some years ago, he/she can opt for it later and covert the policy.