Difference between Term Insurance and Traditional Life Insurance

Term Insurance

1.Term Insurance is a pure insurance which covers only Risk.

2.Term Insurance provides only insurance coverage with a lesser premium amount compared to traditional insurance.

3.Term Insurance don’t gives maturity benefits. Insurance amount can be claimed only when risk happens.

4.If risk happens complete Sum Assured will be paid.

5.Some Term Insurance policies gives maturity benefits, but these are not pure term insurance policies and are costly.

6.Only Single Premium Term Insurance policies can be surrendered.

Traditional Life insurance

1.Traditional Life insurance schemes provides insurance as well as savings.

2.Since it contains Risk coverage as well as guaranteed maturity return we need to pay much premium for adequate insurance coverage.

3.When maturity date comes insurer receives sum assured and bonus value in traditional life insurance schemes.

4.If anything risk happens Sum Assured along with acrued bonus will be paid.

5.All Traditional Insurance policies gives maturity benefits.

6.All Traditional Insurance policies can be surrendered.

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