The need for life insurance arises to obtain a form of financial protection against accidental incidents or deaths for which individuals are not always prepared. If insurance is ready, through payments of the premiums, then in cases of accidental deaths or incidents, individuals can be insured. Life insurances provide benefits for deaths or critical illnesses, for financial interests of individuals and family, for insurances at different stages of life, plans for retirements, loan facilities, as well as with benefits of tax payments (Why life insurance?, n.d.). The two main types of insurance are the whole life insurance and term life insurance where the whole life insurance offers for permanent insurance and term life insurance offers for insurance for certain terms or period of time (Magni, 2013).
The present study discusses about life insurance with particular focus on the differences between whole life insurance and term life insurance and trying to determine which is better, also having an understanding of the relationship of the insurance with economic situation.
Term life insurance is defined as the policy of life insurance whose coverage period for the insurance has a set duration limit. On expiry of the policy the owner of the policy can decide on either renewing the policy or to end the coverage of the insurance plan. The benefits associated with such insurances are mainly limited up to the death of the policy owner. However in order to obtain the benefits of the plan, the death of the owner is necessary to occur within the time limit set by the term life insurance. If such time limit is passed and nothing happens to the individual, the owner does not receive any benefits from the insurance. Thus term life insurance do not provide with any savings from the investments that the policy owner makes for the insurance (Term Life Insurance, 2013).
The universal policy of life ...Show more