Term vs Life Insurance: What is the difference? | Full Guide
Kya aap jante hain ki life insurance aur term insurance mein kya antar hai? Nazar Ya! ke saath aaj hum detail mein samjhenge ke ye dono kaise aapki financial planning ko shape de sakte hain!
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00:00Insurance can save lives. But seriously, life insurance and term insurance can help
00:11your family a lot. They may not meet your needs, but they can give you financial stability
00:19and help you save tax. So today, in Nagariya ki Nagariya, we will understand the difference
00:26between term insurance and life insurance.
00:29Life insurance, as the name suggests, is a policy that gives you lifelong protection.
00:36These plans not only cover your life, but also give you savings.
00:40That's why they are a little more expensive than pure term plans.
00:44In life insurance plans, the premium is divided into two parts.
00:48First, death benefit. This part is used to give death benefit to the nominees.
00:53If the policyholder dies, the nominees get a fixed corpus amount.
00:58This also comes with assured maturity benefits and bonuses are also included in it.
01:05The second part of the premium is allocated for investment and saving components.
01:10This generates returns and benefits in the future.
01:13These plans are very flexible. You can take a loan against the policy,
01:19make partial withdrawals, and pay additional premiums.
01:24Additional premiums give you more benefits.
01:27For example, let's say a 31-year-old buys a policy worth Rs. 1 crore
01:33and pays a premium of Rs. 80,000 every year.
01:36In the next 20 years, the policy's cash value can increase to Rs. 25 lakh.
01:40This cash value can also be used to take a loan.
01:43If the policyholder dies, the nominee gets Rs. 1 crore.
01:48Likewise, life insurance not only provides financial security to you and your family,
01:54but also offers options for savings and investment.
01:58You can also think of it as leaving a legacy for your children.
02:03Term insurance is a type of life insurance.
02:07It is valid only for a specific term, like 10, 20, or 30 years.
02:12In this plan, cash is not accumulated.
02:15That's why it's basically a protection plan.
02:18Let's say a person is ABC.
02:20He has taken term insurance for 30 years at the age of 20.
02:24If ABC turns 50, he won't get any benefits on his maturity.
02:30So what's the point of taking term insurance?
02:33It's simple.
02:34Term plans have a lot of insured amounts and very low premiums.
02:40This means that ABC's family will be able to take financial support and survive even after his death.
02:47If ABC takes term insurance in his 20s, the premium is also very low.
02:53This premium is very high when taking life insurance.
02:56ABC can invest the remaining amount and build his own corpus.
03:01There can be some financial reasons as well.
03:04Because of which ABC is not able to give a premium of life insurance every month.
03:09That's why term insurance is a good option.
03:12In short, term insurance is an affordable and effective way to get financial protection.
03:18It's also good for people who don't need cash accumulation.
03:23There are different types of life insurance besides term insurance.
03:27Let's give everyone a quick quiz.
03:30Endowment Life
03:32Endowment Life Insurance Policy is a life insurance policy that combines life coverage and savings.
03:40If the policyholder dies during the term, the nominee gets some assured or death benefit.
03:47And if the policyholder survives even after the term, they get a maturity benefit.
03:53Which can include some bonuses along with some assured.
03:57Unit-linked Insurance Plan
03:59Unit-linked Insurance Plan or ULIPS
04:01This is a type of life insurance plan that combines life cover and investment options.
04:07ULIPS plan allows you to invest in different asset classes.
04:12Like equity, debt, and money market funds.
04:15ULIPS has a lock-in period of 5 years.
04:19But you can switch your funds at any time.
04:24Products are market-linked.
04:26So, there is an opportunity for growth but there is also a risk.
04:29Money-back policies
04:31This is a life insurance policy in which an insured person gets periodic payouts during the policy term.
04:38This is a blend of savings and insurance.
04:41If the policyholder dies during the term, the beneficiary gets a death benefit payout.
04:48Every type of policy comes with its own benefits and limitations.
04:52You have to choose which policy is best for you according to your financial goals and requirements.
04:59So, this was a quick guide on life insurance.
05:02Financial protection is important for your life.
05:06Life insurance is a tool that keeps your loved ones secure.
05:11With life insurance, you can make your life secure.
05:15I hope you learnt something from this video.
05:18Like life insurance, subscribe to stay connected with us.
05:23And don't forget to like.
05:25Let us know in the comments which insurance policy you have taken.
05:28I am your host, Tanika.
05:30See you in the next video.