ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Term life insurance rates are lower (depending on your age and overall health) than whole life insurance premiums since it is simple and does not develop cash value. The cheaper rates for term life insurance plans are due to the fact that the coverage is only valid for a limited time.

Detailed explanation-2: -Term life insurance It is sometimes called “pure life insurance” because, unlike whole life insurance, there’s no cash value to the policy. It’s designed solely to give your beneficiaries a payout if you die during the term. Most individual term policies have level premiums, so you pay the same amount every month.

Detailed explanation-3: -Term life is typically less expensive than a permanent whole life policy – but unlike permanent life insurance, term policies have no cash value, no payout after the term expires, and no value other than a death benefit.

Detailed explanation-4: -Term life insurance does not offer a cash-value benefit. It is possible to use strategies like withdrawals or pay premiums to utilize your cash. Beneficiaries of these policies only receive the death benefits, not the cash-value accumulations.

Detailed explanation-5: -Universal life insurance is also referred to as “flexible premium adjustable life insurance.” It features a savings element (cash value) that grows on a tax-deferred basis. The insurer invests a portion of your premiums.