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Buy a term plan and secure your family
There are multiple life insurance companies in the UAE that offer a variety of life insurance policies in order to fulfill the different requirements of its customers.
The most basic life insurance policies are the term insurance and the traditional life insurance policy. Read on to know more about the basic differences between term insurance and traditional life insurance plan based on several factors.
Traditional life insurance plans are popular among people who want security and returns on their investments. Insurance companies offer sum assured along with the guaranteed maturity benefits for the insured.
Whereas, a term insurance plan that is also known as a pure protection plan. This is a basic type of life insurance policy that insures you a certain period of time and it only offers death benefits to the beneficiary in case the policyholder dies during the tenure of the policy. If you survive the policy term, there is no survival benefit offered to the insured.
A term life insurance provides death benefits to the beneficiary(s) in an event of the untimely demise of the insured during the policy term. In case the insured outlives the policy tenure, no maturity benefits will be offered to the policyholder.
On the other hand, the traditional life insurance policy offers life coverage for the policyholder along with the maturity benefits. By opting for the traditional life insurance policy, the insured can not only provide the financial protection to their dependents in any eventuality but also it can build an investment corpus that will be beneficial for fulfilling various financial goals in the future.
A term insurance policy is less expensive as it comes with a low premium and offers high sum assured. It is indeed a cost effective way of protecting your family financially in your absence. However, the traditional life insurance plan comes at a high premium as compared to the term life insurance plan. One of the main set back of traditional life insurance plans is that even at a high premium cost, the death benefit is not adequate to protect your loved ones in any contingencies and the return of return is around 5 to 6 percent. Also, maturity benefits depend on a wide range of factors such as premium payment, reversionary bonus, and the like. Therefore, a term insurance plan is apt for people who don’t have a secure source of income.
Ideally, if you are not a married individual who is in his/her 20s or 30s, a term insurance plan is the feasible option for you. This type of insurance plan will offer you wider protection for affordable premium payments.
And if you are a married person who has children as well then opting for a mixture of term and traditional life insurance will be a great choice. With this, you will get cash value that can be used to meet the various financial goals in life while the term life insurance plan will safeguard your loved ones with high monetary benefits.
In A Nutshell
In short, you can opt for any of the life insurance policy that suits your need the best. Also, don’t forget to purchase through a reliable insurance company who has a good claim settlement ratio.
In this article, we have mentioned the distinct features & benefits of both the life insurance policies so that you can analyze what is suitable for you the most.