Research the differences in the premium costs for a $100,000 whole life insurance policy and a...

Research the differences in the premium costs for a $100,000 whole life insurance policy and a $100,000 term life insurance policy. Which is more expensive? Why is there a price difference between the two? Which would you prefer and why?

Expert Solution

Life insurance policy-

Premium of life insurance policy is charged yearly over the plolicy period. This policy period may very upto 70/80, years of age or upto the policy term.

Premium of this is payable on a scheduled date. This policy can be surrendered and one can get the surrender value of the policy.

On maturity or on death which ever is earlier nominee of the policy holder or Policy holder as the case may be will get the policy amount.

Therefore Premium paid per year is lower in case of Life Insurance Policy.

The Term life policy is again on the life of the insured, but the period is one year, if policy holder dies nominee of the policy holder will get the full amount.

Therefore Insurance companies are charging more yearly remium than it charges on life insurance policy.

Under term insurance policy if death does not occure within policy period then then policy premium is not refundable.

Premium under both the policy will depend on Age of the insured.

ekkarill92 answered 2 years ago

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