The premium paid for Whole-Life Assurance is _________ than the premium paid for Term Assurance.

The correct answer is Higher.

Key Points

• The premium paid for Whole-Life Assurance is higher than the premium paid for Term Assurance. 
• Whole-Life Assurance
  • ​It is a type of permanent life insurance.
  • It means the insured person is covered for the duration of their life as long as premiums are paid on time.
  • It offers the dual benefit of life cover and bonus.
  • The life insurance plans provide death benefits along with maturity and survival benefit to the policyholder.
  • The premium is paid only for a limited duration and therefore, it is high.
  • Every year, the insured pays a premium. Out of this, a portion is used for providing protection, and the remaining stays invested in the company.
  • If a profit is earned, the policyholder is entitled to get a bonus on the invested amount.
• Term Assurance
  • It is a type of life insurance policy that provides coverage for a certain period of time.​
  • If the insured dies during the time period specified and the policy is active, or “in force,” then a death benefit will be paid.
  • The premium paid is lesser than the Whole-Life Assurance.
  • There is no savings/profits component in the Term Assurance.

Additional Information 

• Factors that can define Insurance Premium Rate-
  • Age (Mortality)
  • Gender
  • Medical history
  • Smoking habits
  • Marital status
  • Occupation
  • Policy Term
  • Mode of buying the policy
  • Premium Payment Frequency