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Life Insurance

Life Insurance is a policy that pays benefits in the form of a lump sum payment to the named beneficiaries at the time a person passes. The policy serves as a contract and requires regularly monthly premium payments. This type of protection may be one of the most important decisions an individual makes.

What it is it and who is it for?

Anyone with a family should have some form of coverage. It helps families meet financial obligations in if one dies. Property owners use it as a form of mortgage protection. It can be used to pay off the mortgage balance if the payment periods coincide. Couples planning a future with multiple incomes in mind but if one passes unexpectedly, the policy can be substituted for the missing income of the deceased person. Final expenses are the most popular ways to cover burial costs if a person passes. The policy funds tuition costs for named beneficiaries and can be timed to become available when children enter college. This protection also covers inheritance tax obligations that may be assessed to one’s heirs if a person passes.

What are the different types of coverage available?

Term life coverage pays a death benefit if a person dies within the coverage period. These policies can be easily renewed and premiums are non-refundable. Whole life coverage offers a death benefit indefinitely as long as the premiums are consistently paid. This policy accumulates cash value that can be borrowed against. Universal life protection allows a person to pay over the premium amount and the excess goes to an interest-bearing account. Universal life coverage has a cash value that never falls below the quoted guaranteed interest rate and is determined by the short term interest rates.

It is estimated that over 60 million Americans do not have life insurance. Life policies cover burial costs and lowers funeral expenses for the family. It helps families guarantee that mortgage obligations, college education plans, and inheritance tax requirements are met. The protection can be used as an investment vehicle and can be withdrawn from on a regular basis as long as payment terms are met.