What Is The Difference Between Term Life Insurance And Whole Life Insurance

Car insurance protects your car. Homeowners insurance protects your house. Your family’s financial security is much more important than a car and house. This is the reason why everyone recognizes the importance of having life insurance in Dubai. Your loved ones depend on you. In case any misfortune happens, there should be a way to address the financial needs of your family. This highlights why permanent or term life insurance in Dubai is important. 

People are already aware of permanent or term insurance for NRI in Dubai. The purpose of writing this article is to educate those who do not know much about life insurance.

What is Life Insurance?

There are many best insurance companies in Dubai offering life insurance. It is a contract between an individual and an insurance company. You will make insurance payments. In case misfortune happens, your beneficiaries will receive a lump sum from your insurance company. This lump sum can be very helpful for your family to address their financial troubles. Life insurance is like a safety net.

Most of the best insurance companies in Dubai offer the following two types of life insurance:

  1. Term Life insurance

  2. Permanent Life insurance

Term Life Insurance

Term life insurance is the most affordable and popular type of life insurance. If you invest in term life insurance in Dubai, premium payment and coverage will be for a certain amount of time. Depending on the period you choose, term life insurance can provide you coverage for 10, 15, 20, 25 or 30 years. After your death, your family needs to claim to receive the lump sum. Your family does not need to pay any taxes on this amount. In case the policy expires first, you can renew it. 

Permanent Life insurance

This type of life insurance provides you with lifelong coverage. Permanent life insurance is more expensive because of the following reasons:

  • It builds cash value.

  • It offers lifelong coverage.

The following are different varieties of this type of life insurance:

  • Whole Life insurance

  • Universal life insurance

  • Survivorship Life insurance

Whole Life Insurance

In this type of life insurance, you will get a fixed death benefit. The cash value grows at a rate of return. 

Universal Life Insurance

This type of life insurance is more flexible than whole life insurance. This allows you to change premium payments and other benefits with some limits. The cash value depends on the type of policy.

Survivorship Life Insurance

Also known as “second to die life insurance”, in survivorship life insurance, one policy covers two individuals. Usually, survivorship life insurance is for married couples. Beneficiaries receive the death benefit when both individuals die. 

Different people have different life insurance requirements. You can speak to a representative of one of the best insurance companies in Dubai. The representative can analyze your financial situation and insurance requirements. This can help you decide whether you should go for term life insurance in Dubai or permanent life insurance in Dubai. You can also get and compare quotes from the best insurance companies in Dubai.