Does Your Term Insurance Provide a Whole Life Cover?Share Tweet Share Pin it
Term insurance is the foundation of excellent financial planning. There are certain advantages to a life insurance policy, and it also comes with some limitations. Therefore, it is extremely important to choose term insurance that meets the needs of you and your family.
Now, when buying term insurance, you should check with the insurance provider whether the insurance provides whole life cover as well. Whole life cover is also considered as long-term care, and not many term insurance provides a whole life cover. You can use your life insurance policy to pay for long-term care through different options.
In this post, we will discuss what is term insurance and whole life insurance and explain their main differences. Moreover, we will also discuss if term insurance provides whole life insurance.
So, without further ado, let’s jump right into it.
What is Term Insurance?
Term insurance is the simplest form of life insurance policy that offers a lump sum paid as Sum Assured (Death Benefit).
It is designed in a way that it is only available for a limited period of premium payment years. One of the main reasons why you should purchase term insurance is its low premium and the substantial coverage amount. But you should know that there are no benefits when the funds mature.
- Incredibly cost-effective
- Provides higher coverage at low premiums
- Offer numerous riders like accidental death, critical illness, etc.
- Ideal if your dependents need financial protection after you are gone
- Perfect for those who need pure protection for a predefined time
What is Whole Life Insurance?
Whole life insurance, unlike term insurance, offers both savings benefits as well as death benefits. The policy is designed to last your whole life. When you decide to surrender your policy, you will get a lump sum. Moreover, such a life insurance policy also offers flexibility in terms of choosing withdrawals as well as premium payment frequency.
- Offers long-term benefits – even up to 100 years
- Offers flexibility for withdrawing money for numerous financial needs
- Provides both death benefit as well as maturity benefit
- Helps in building a corpus for future
Now that you clearly understand that term insurance and whole life insurance are, the question is, does your term insurance provide whole life cover.
There are term insurance policies that can be used to pay for long-term care, even if that means your whole life. You can use your life insurance to pay for whole life cover through the following options:
- Viatical settlements
- Life settlements
- Accelerated Death Benefits
- Combination Products
You will have to research a lot when looking for term insurance that offers whole life cover as well. Not all insurance providers offer such insurance products. As the insurance provider about the benefits and criteria for getting such a scheme.
A life insurance policy is a must to have to make sure that your family and loved ones lead a peaceful life after demise. You would not want them to worry about the financials after you are gone.