The question everyone asks
"Should I get term insurance or whole life?"
It's one of the most common questions we hear. And the answer isn't as complicated as insurance agents make it sound.
Let's cut through the jargon.
What's term insurance?
Think of it as pure protection. Nothing else.
You pay a premium every year. If something happens to you during the policy term, your family gets the money. If you survive the term? You get nothing back.
Sounds harsh, right? But here's the thing.it's incredibly cheap. We're talking ₹500-1000 per month for ₹1 Crore of coverage.
The good stuff:
- Maximum protection at minimum cost
- Simple, no hidden complications
- Easy to understand
The not-so-good stuff:
- No money back if you survive
- Premiums increase if you renew
What's whole life insurance?
This one covers you for your entire life. Plus, it has a savings component that builds up over time.
Sounds better, right? There's a catch.
The good stuff:
- Guaranteed payout whenever you die
- Builds some cash value over time
- Forces you to save
The not-so-good stuff:
- Much more expensive (think 10x higher premiums)
- Complex product with hidden charges
- Returns on the "savings" are usually poor
So which one should you get?
Here's our honest take:
For most families, term insurance makes more sense.
Why? Because the primary purpose of life insurance is to protect your family. Not to save money. Not to invest.
The "savings" component in whole life insurance typically earns 4-5% returns. You could get 10-12% in a simple mutual fund.
So buy term insurance for protection. Invest the difference elsewhere.
When whole life might make sense
There are some situations where whole life works:
- You want guaranteed lifetime coverage
- You're doing advanced estate planning
- You genuinely can't save money any other way
But for 90% of families? Term insurance is the answer.
The bottom line
Don't let anyone upsell you expensive insurance when affordable term insurance does the job. If an agent is pushing whole life hard, ask yourself: whose interest are they serving?
At YASHURE, we recommend what you actually need. Even if it means we earn less commission.