Should I go for a term insurance policy with benefits at the end of the term or one without the benefits?
Sudhir Naik, Pune
A term insurance policy that does not give profits is also known as a pure risk insurance policy. A term policy with additional benefits, such as the offer of a lump sum at its maturity, will have a higher premium than a pure risk cover. One needs to consider the opportunity cost of investment by comparing the return generated by the policy with the return that any other investment opportunity would give if an amount equal to the loaded premium is invested in it. Ideally, life insurance should not be mixed with investment and a person should take a pure risk cover as it gives insurance cover at the lowest premiums. You should ideally go for a term policy without any benefits.
