There are so many financial tools and terms out there that it is only natural for people to face doubt and confusion. In an internal debate within your mind wherein you are trying to figure out which is the best life insurance policy, it is highly possible that you find trouble differentiating between its different kinds and the types of benefits they offer. In this particular article, we will learn about the difference between voluntary and Basic life insurance.
Voluntary Life Insurance
Voluntary life insurance is offered by employers to their employees wherein they have to pay a relatively low premium.
- It is an optional benefit provided by the employer that will help you and your family in times of need.
- It enables you to buy your insurance at a reasonable group rate, and you also have the option of adding riders to it.
- This kind of insurance allows you to customise your group insurance and provide the required financial coverage in cases of an accident, partial or permanent disability, critical illnesses, etc.
Basic Life Insurance
Basic life insurance is like a contractual agreement between you and your insurer wherein you get a protection cover for your loved ones.
- It is said to be one of the best insurance policies as your insurer pays a death benefit as a lump sum cover to your loved ones or beneficiaries in the situation of your unfortunate demise. The decision on how to use this lump sum amount lies entirely with the beneficiaries.
- This is not an investment or a money back scheme but a pure protection scheme for your family’s financial security - the monetary benefits are available only on death of the policyholder.
- If the policyholder survives the term period, there is no lump sum payout.
Voluntary Life Insurance
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Basic Life Insurance
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Employer benefit
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Private/Personal Insurance
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Premium is relatively lower
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Premium as per chosen cover
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Less customisation
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More customisation
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Validity is till the time the employee is part of the organisation
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Validity depends on the term period chosen by the policyholder
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No medical check-up needed
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Medical check-up needed
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Guarantee issue provided
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Guarantee issue not provided
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If you are wondering whether you can buy life insurance online, then the answer is - Yes, you can. In fact, owing to the COVID-19 pandemic, many people have actively shifted to the online forum for looking after their financial tools and investments. People did buy policy online before the pandemic as well, but the frequency of online purchases has only increased post social distancing.
Whether either of the two insurances are necessary is entirely up to you, but it is advisable to get both voluntary and basic life insurance. Each has its own benefits to offer, but both of them ensure financial stability for you and your loved ones. It all comes down to choosing the best policy for which you need to have all the information so as to make the right decision. There are a host of insurers and banking institutions you can find by doing a quick search on the internet to buy policy online! Research well and choose wisely!
