What is the difference between life insurance and death and total and permanent disability insurance?
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Asked April 27, 2011
There are two major types of life insurance: whole life, and term life. Whole life insurance stays in effect for your entire life as long as the premiums are kept up to date. Term life insurance is valid for a well-defined length of time and expires at the end of the term unless it is renewed at additional cost.
Accidental death insurance applies only to situations where the named person dies in an unpredictable way, which could include a mechanical malfunction, a car accident or some other situation where the death of the insured person was completely outside of that person's control. It is a form of life insurance, but does not qualify as either term or whole life coverage.
Disability insurance protects the insured person against problems that make that person totally or partially disabled. Disability insurance is not a life insurance policy, as the insured person can collect on the account where life insurance is paid out after the person has died. Disability insurance can be set up to pay a lump sum, or to help manage bills and financial obligations for a limited time. One of the most popular types of disability insurance is provided by AFLAC and can serve as a supplemental income during times of dire need.
Other types of insurance include final expenses life insurance which is only intended to pay for funeral related expenses, and infant life insurance which is a form of whole life insurance that is purchased for a young child and allowed to mature over that person's lifetime. Infant life insurance is generally much less expensive than other types of life insurance because of the increased length of the policy coverage and the reduced amount of immediate risk faced by the insurer.
Answered April 27, 2011 by Anonymous