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Term Insurance vs Car Insurance: Which One Is Better For You?

Have you signed up for a term insurance? Forget that for a second. Do you have insurance for your car? Chances are you do. Does your car insurance cover any damage that occurs to your body? If yes then to what extent? I know you will be irritated by so many questions. However, the point here is not to irritate you but ask you a simple question. Your car may be worth lakhs or even crores. However, it is costlier than your life? If no, then do you have a term insurance in your name? No? Before we ask you to sign up for a term insurance plan, let us present to you our case. We will do so by way of Term Insurance vs Car Insurance comparison.

Term Insurance vs Car Insurance

Term Insurance vs Car Insurance

Scope of Coverage

In terms of each policy’s coverage scope, the car insurance scores higher. It not just covers your car against damages but you too. In contrast, a term insurance plan covers only your health. However, you can option it to cover your family members. In addition, it can also cover accidental death or disability, terminal illnesses and much more. So, while the scope of coverage for car insurance is wider, the extent is more for term insurance.

Coverage areas

A car insurance is a policy meant specifically for a car. Going by that sense, a car insurance can cover a lot of areas that can affect a car. A hydrostatic lock cover will help you when your car stalls on waterlogged roads. In case you lose your car keys, a lost keys cover will take care of the same. These are just some examples. In case of term life insurance, you can ask for cover against accidental death, accidental disability, terminal illnesses and other such issues.

Also Read: Health Insurance vs Life Insurance

Cover Limit

A car insurance cannot cover more than the cost of your car. It means no matter how much you try to keep the IDV high, it will at max touch the car’s showroom cost. A term insurance, though, covers way more than that. It can provide you as big a cover as you desire. All its asks you to do is pay the premium on time. Some term insurance plans also provide linked payments, which is just the icing on the cake.

Return of Premium

Say, after you are done with your car, can you ask the insurer to pay back the premium? No, right? In case of term insurance, you can do that. There is a specific cover called return of premium using which, you can ask for all the amount you paid as premium will be given back to you.

Term Insurance vs Car Insurance – Conclusion

A car insurance is not bad. However, it is a necessity to ensure you operate your car safely on public roads. A term insurance is not a necessity. So, you don’t pay much attention to it. However, a term insurance offers you way more than a car insurance does. Also, do think about it – What is easier to afford – a new car or death of a near-and-dear?

The winner of this Term Insurance vs Car Insurance comparison is Term Insurance. Since it protects you and you matter, anything that protects you is a winner in any comparison.

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About the Author: Praveen Unnikrishnan

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