WEDNESDAY, NOVEMBER 25, 2020
Unlike whole life insurance policies, term life insurance is designed to cover only a specific length of time. Generally this time is 10 years, 20 years or 30 years, but other terms are also available. But what happens if the policyholder does not pass away while a term life insurance policy is active? Can you receive your money back from a term life insurance policy if benefits are not paid? 
Unfortunately, term life insurance policies do not operate as a savings account. If the policyholder does not pass away while the policy is active, they will not receive money back for the premiums they paid in return for coverage, nor will the beneficiaries on the policy receive any of the benefits. Instead, premiums paid will essentially be used to supplement other family’s life insurance plans for those whose family members did not survive the term limit.
Is Whole Life Insurance Better than Term Life Insurance?
Keep in mind that even if you will not receive compensation from your life insurance policy, this does not mean another policy will be better. For example, if you cancel a car insurance policy, you will not receive the premiums you have already paid. The same rule applies for life insurance, whether it is a term life insurance policy or whole life insurance policy.
This means that you will need to carefully consider your life insurance needs and the benefits and downsides of each type of policy. A term life insurance policy is useful for those who only want coverage for a certain amount of time, such as if they wish to protect their family until they have paid off a substantial debt. A whole life insurance policy is useful for those who simply want a policy for as long as they live, especially if they are the breadwinner in their family. There is no set decision on which policy is better since both serve different purposes.
The only policy that may allow you to withdraw cash value is a universal life insurance policy. This policy can also serve as a savings account that allows you to withdraw cash value while the policy is still active and is only available as a type of whole life insurance policy.
Speak with your family and your insurance agent about your specific life insurance needs to make sure you get the right policy.
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