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Life Insurance


The Importance of Life Insurance

Life insurance is protection that most people don’t like to think about but all should seriously consider. This applies to both financial planning and family responsibility. It can assist you and your family through the most devastating of times.

What It Does

Life insurance is primarily designed to provide financial assistance to survivors when the policyholder passes away. The payout can be utilized for such things as funeral expenses, any remaining debt and maintaining a standard of living for your spouse and children, giving them time to get back on their feet. It may also be used for financial assistance and flexibility in time of need as part of a good estate planning package.

How It Functions

The policyholder generally pays a monthly premium and in exchange, the insurance provider pays out a specified amount when the policy is triggered. The person to whom the money is awarded, ‘the beneficiary’, can generally choose how the money is put to use. The benefits may also be put into a trust, which can then be paid out according to the terms of the trust. The responsibilities of the insurance provider are put forth in detail in the original contract.

Kinds of Coverage

There are some different types of policies available. Whole life is a popular kind of comprehensive life insurance. Policyholders pay their premiums, which are determined from a battery of health questions and the amount of coverage desired. Assuming the policyholder pays his or her premiums on time, the policy remains in effect. Perhaps the most popular option is term insurance.

Perhaps the most popular option is term insurance, which only provides coverage for only a set period of time. For instance, should you have a 15-year term policy, you will be covered for 15 years. However, after that period ends, you must obtain new coverage. Although premiums will increase, sometimes significantly, at the end of the term, it is very affordable during the initial term. This makes ideal to protect young families.

Universal life offers similar coverage to whole life. However, there is also the option of investing some of the premiums. This can potentially increase the benefit amount more swiftly should the investments do well.

Big Benefits

If you’re like most people, you have someone you love and would like to see taken care of financially when you die. Life insurance is an easy, affordable way to make sure that happens.