What is the differance between Basic Life And Supplemental Life insurance?

Basic life insurance is generally consider to be either whole life or term life insurance coverage. Supplemental life insurance is when a rider is purchased to increase the value of the policy without taking out a new life insurance policy altogether. Supplemental insurance is not usually available on a term life policy because that type of coverage is already constrained within certain defined limits and conditions, but is more often taken out to supplement a whole or variable life insurance policy, resulting in a higher claim value when the policy matures.

Supplemental life insurance is not a complete insurance policy, but is used to increase the value of existing policies. For example, if you had a whole life policy that was valued at $100,000 and your net worth has increased, you may want to take out a supplemental life insurance policy to cover the difference between your original policy and your current insurable value, to make sure that your loved ones are properly cared for when the time comes.

The advantage of a supplemental life insurance policy is that the supplemental coverage can be dropped at a later date without sacrificing the original coverage. If your financial situation deteriorates and it is no longer feasible to carry the supplemental coverage, you can drop the additional coverage and only lose a small percentage of the premiums you have paid rather than the entire policy. Being supplemental, the coverage may also be transferable to other policies offered by the company, but it is best to assume that your supplemental life insurance applies to the current policy and will be lost if the account is allowed to go into default.