Long-term insurance vs whole life


Q: What can you tell me about the benefits (and drawbacks) of a universal life policy that can be converted to cover a disability compared to a long-term disability insurance policy? I found the idea that a beneficiary could receive death benefits appealing if one never uses or only used some small portion of the amount of the policy, rather than have all the funds placed into a long-term care disability plan just disappear upon your death.

A: A general comparison is impossible since each policy is different. You are, however, buying and paying for what are effectively two insurance policies — long-term care and life insurance. You should compare the cost and benefits of the combined policy with its equivalent combination of two similar policies.

In my experience, the insurance industry rarely rewards you for selecting the most convenient solution to a problem, however.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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