Jakarta, CNBC Indonesia – Traditional life insurance is divided into two types, namely term life and whole life. These two types of insurance have different benefits and characteristics.
Both term life and whole life insurance are aimed at different markets, according to each individual's insurance goals.
The following are the differences between term life and whole life insurance, which you should know.
Term Life Insurance
Term life insurance is a type of life insurance that provides protection only for a certain period or term, such as one, five, 10 years or more.
If the policy holder experiences total permanent disability or dies during the protection period, the beneficiary will receive compensation or insurance money.
However, if the policyholder is still alive when the protection period ends, the policy will expire.
Term life insurance premiums tend to be cheaper for large amounts insured, as long as the insurance does not have additional features such as return of premium.
Whole life insurance
Meanwhile, whole life insurance provides the benefit of lifelong protection, and because the protection period is long, namely up to the insured up to 99 years, whole life insurance premiums are more expensive than term life.
Whole life insurance is also not equipped with a premium return feature because this insurance will cover the customer for life.
Which one is better?
If asked which is better, everything will really depend on your goals and ability to insure.
When your goal is only to provide financial protection to your family to anticipate disaster while you are still of productive age, then term life insurance is the answer.
Term life insurance can also be a solution for those of you who have a modest income but need life insurance.
Meanwhile, whole life is more intended for those who want to give an additional inheritance to loved ones.
[Gambas:Video CNBC]
Next Article
Want to Buy Insurance? Read this first so you don't feel lost
(aak/aak)