What is the difference between whole life and term life policy? What happens if a policy lapses?
Life insurance gives you and your family financial protection against the financial loss that can happen after your death or if you suffer from total and permanent disability (if this benefit is provided). For a whole life insurance policy, you can either pay premiums throughout your life or for a limited period, yet enjoy life-long protection (do note that total and permanent disability coverage usually ceases at age 60 or 65). There is usually a surrender value after a stipulated period of time. In the event of a claim, the policy will pay out the sum insured and any bonuses you have accumulated over the years. A term policy aims to provide a higher sum assured at an affordable premium. You can choose to be covered for a specific duration or up to a certain age, and you have the flexibility to choose if you want to pay premiums for a limited period or throughout the policy term. Normally, the term policy does not have surrender value. However, some term policies allow you to attach a
