May 19, 2010

Which One Rules? Term Life Insurance Vs Whole Life Insurance

What do you think is a better insurance? As per my point of view, these are two different policies serving different purposes. Term life and Whole life both have their own strong and weak points. So the question of comparison does not even arise. If you are living in India then this is most useful to choose right life insurance plan.

Referring history, all insurance was term insurance covering life only. But with time consumers started complaining about the benefits one should receive after paying the premium over 20-30 years. They felt it was injustice. Henceforth, life insurance started giving the option of cash value.

Let us discuss the main features of Term Life Insurance and Whole Life Insurance as described below.

Term Life Insurance:

  • It covers life only.
  • Premiums are paid only for the term period
  • The premiums are cheaper
  • Beneficiary is eligible to benefits only in case of death.
  • If the policy holder lives after the maturity term, there are no benefits.
  • It covers life only, has no additional benefits to it.

Whole Life Insurance:

  • It takes care of both life and investment.
  • Premiums are paid life long.
  • The premiums are expensive.
  • Beneficiary is eligible to benefits in case of death.
  • If the policy holder lives after maturity period, the policy holder receives both the maturity value plus cash value as applicable.
  • It has dual purpose, covers life and offers added benefits like cash value.

Which one is better according to you choosing?

From the above we can make out that both these policies are different and do not serve the same purpose. Term life insurance benefits people who generally have good health and follow healthy living. They can save on the large premium to be paid out and go for other better investment instruments. Whereas Whole life insurance benefits people who are already suffering from certain kind of disease and cover is necessary. It generally works for people who are wealthy enough to carry on paying huge premiums life long.

The combination of both term life insurance and whole life insurance is the best portfolio of life insurance one can possess.

But first and foremost, it is necessary to understand why you are purchasing life insurance. You will be more content when you figure out why you wish to buy the policy. Analyze your needs and its importance. Figure out what needs to be covered and who should receive the benefits, etc. Once you make a decision, start shopping for quotes from various sources like the local representatives, brokers and sites having online comparing tool. Compare the quotes received, the coverage level, other added values, offers, etc. they are offering. Choose the policy that fits your requirement in the best way at the most competitive price available.

And at PolicyBazaar, you can find the right insurance plan at most competitive rates. You also take special offers going on from time to time, for any type insurance help or enquiry you can call 0124 457 67 77 and also see website: http://www.policybazaar.com/life-insurance/life-insurance-india.aspx

Chavi Singal
http://www.articlesbase.com/insurance-articles/which-one-rules-term-life-insurance-vs-whole-life-insurance-724374.html

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Comments on Which One Rules? Term Life Insurance Vs Whole Life Insurance

May 19, 2010

shadow77 @ 6:15 pm

How much can I afford in rent? I need some good advice from renters.?
Ok first a little background:

I have been living in the same crappy room in the same crappy rowhouse with the same crappy housemate for 3 years due to the incredibly cheap rent ($250/month). I’m 24 and male, but I’m a thrifty person, perhaps paranoid about my financial situation (never had much financial stability), and so I pinch pennies even if it means sacrificing happiness/comfort/etc. My life to an outsider would seem pretty miserable but I’m very simple and I don’t expect that to change very much.

Basically, I’m tired of my living situation and I’m literally running out of space. I sold my car and ride a bike to work (8 miles round trip). I don’t own any furniture (bed, dressers provided with room), so I would need to buy some basic furnishings.

I am looking at an apartment (from my same landlord), that has all utilities included for $450 a month. That sounds like a great deal, but its in the same shifty neighborhood, in a boarding house situation. Ideally I’d live somewhere else, but prices only go up, and utilities arent included.

I’m currently making $11/hr at 40 hrs a week. My net weekly check is usually around $350 after all deductions (city tax is brutal). I know most people say take weekly, multiply by 52 and divide by 12 to get my monthly income, but people dont take into account days with really heavy snow(in which my employer closes), and other lost days of work. I figure if I don’t miss a day of work the whole year, I should anticipate losing 1 week due to weather, holidays, etc.

$350 x 51 = 17850 / 12 = 1487.5

If I follow the 25% of pay rule, I can’t afford even this cheapo apartment. If I follow the 33% rule, I can.

Considering that I dont pay for a car or auto insurance, and I make my own food and don’t have any credit-card debt, what would you say is the most I can comfortably afford in rent and utilities?

I might get a raise in the future but I might be stuck at $11/hr for a while. I like my job but Its a relatively new job so I’m still worried about my long-term situation.

Should I stick it out where I am for a bit longer? I just feel sort of trapped here.

Thanks in advance for reading all of this.

Excessive MHz @ 11:17 pm

Rules schmooles.
It’s really about how comfortable you are with income/debt ratio.

Anything under half should be comfortable.
References :

k10394 @ 11:19 pm

You need to get a partner.Its so hard to live by yourself these days.Date, get out. FInd some happiness. Its hard work to even do that but why not try. You dont have to get married just find someone of opposite sex who is ready to partner up as friends or lovers.you will be much more happier.Dont stick anything out. make a move with someone.it might take a year but have fun trying.
References :

Elissa @ 11:21 pm

It’s important to be happy too. Sometimes we can make due even when we don’t think its possible. I think you could do it. Considering your good with the money you have. Just make sure you put your rent money aside first before anything. And maybe look for a higher paying job, although I know right now that is not easy. Maybe even put an ad in the paper and get a roomate in a little bit of a bigger place, that’s a little more expensive, but when the rent is split still cost the same. Otherwise, if you have to stick it out, look for something else in your life to try to lift your spirits. Good LUck.
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Kathleen @ 11:23 pm

You can go on welfare or SSI. Which would be like $650 a month.
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Seph2 @ 11:25 pm

Try to ask some parents or relatives to stay until you can save some money.
References :

spalmer @ 11:27 pm

The 33% rule for housing costs (rent, utilities, insurance, etc) is based on gross income, not your net income. So, that would be approximately 1,760/month gross income (not including any missed days). Thirty percent of that is $580/month. Ideally, all of your housing should stay below $580 each month. Whether you can afford this, depends on your other expenses. Write out a budget of all of your monthly expenses (don’t forget to include food, entertainment, household items, etc.). If you end up with an extra $1,000/month then you can easily afford to spend $600-$700/month for your housing needs (again, rent and utilities). If you only have $500/month leftover after all of your monthly expenses, then you may need to stay where you’re at until you can cut your expenses. My first apartment was 60% of my take-home (net) pay with rent, utilities, and renter’s insurance. However, I had very few other expenses, so I had no problem covering these costs (I stayed there for 6 years). What you can spend depends on your other expenses. Do you have credit card debt, student loan payments, a car payment, medical bills, etc? Do you have any expensive hobbies that you aren’t willing to give up? Do you eat out a lot? Look at your situation and write out what you must spend each month, then include money to save, and for the extras. Good luck to you.
References :

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