Term life insurance is an important part of a financial plan, and it’s important to understand the differences between term life insurance and term life insurance with living benefits. While both provide a death benefit to the policyholder’s beneficiaries, the main difference between these two options is the presence of a living benefit feature.
Term life insurance is the most basic form of life insurance. It provides a death benefit to the policyholder’s beneficiaries in the event of their death. The amount of the death benefit is determined when the policy is purchased and can range from a few thousand to millions of dollars. The policyholder pays a set premium each month for a set period of time, and when that period of time ends, the policy expires.
Term life insurance with living benefits is a more comprehensive form of life insurance. It provides the same death benefit as term life insurance, but also includes additional features that provide financial protection for the policyholder while they’re still alive. These living benefits can provide financial assistance if the policyholder becomes disabled, needs long–term care, or is diagnosed with a terminal illness.
The main advantage of term life insurance with living benefits is that it provides financial security while the policyholder is still alive. This can be especially beneficial for those who may not have the financial resources to cover unexpected expenses that may arise due to disability or illness. With the living benefits, policyholders can receive a lump sum payment or a monthly income, depending on the policy.
The cost of term life insurance with living benefits is generally higher than term life insurance, as the additional features and benefits come at a premium. However, for those who may be concerned about the financial security of their loved ones, the additional cost may be worth the peace of mind that comes with knowing that their family will be taken care of no matter what.
When considering life insurance, it’s important to understand the differences between term life insurance and term life insurance with living benefits. While both provide a death benefit to the policyholder’s beneficiaries, the living benefits can provide financial security while the policyholder is still alive. Term life insurance with living benefits can be more expensive, but for those who are concerned about the financial security of their loved ones, the additional cost may be worth the peace of mind that comes with knowing that their family will be taken care of no matter what.