In regards to life insurance, many people ask, “What is life insurance?” or “Why do I need insurance?”  This decision can be very hard or confusing. This article may highlight some of the issues that you should think about when purchasing life insurance.
 
Life insurance coverage is a contract between you and the insurance company in exchange for your premium. Upon passing away, the insurance company promises to pay the “death benefits” or certain amount of money to your beneficiary to assist with any financial burdens. Life insurance provide financial support to loved ones who depend on your income, help with burial costs, other final expenses and any mortgage or debts you leave behind.  Keep in mind though,  there are different types of life insurance policies, some which allow you to borrow against as well as provide financial support for your loved ones.
 
One thing to think about is, as your personal situations changes, so will your life insurance needs, for example: marriage, divorce, child birth, job promotion, etc. When choosing what type of policy is going to fit your  needs you want to consider your long-term needs.  There are mainly two different types of life insurance coverage: term or whole also known as (permanent insurance). You have the option of purchaing a term life insurance policy which would cover you for a set number of years ranging from 10-30 years. These policies pay a benefit only during the term period that the insurance covers. A term policy can be a good option if you want coverage for a set period, say, until the children graduate from college. You also have the option of buying a whole life policy, which is also referred to as permanent life insurance. Whole Life policies, which will pay a death benefit for as long as you live, assuming you have made the required premium payments, also builds cash value. There are several types and sub categories of each type of coverage, and they usually pay a benefit to your beneficiaries at the certain period chosen: term or whole.
 
The coverage amount is another important factor to consider when purchasing life insurance. The coverage amount is how much is going to be paid at the end of the policy. The amount of coverage you will purchase will depend on the needs you are trying to meet. First, look at your potential income and your assets. Then, look at how many years your family will need to replace your income if you were to die prematurely. Look at what you want to be covered and paid for such as college tuition for your children, a certain lifestyle or habit your family is accustomed to, burial costs, mortgages on houses, and any debts or liabilities you’ve accured over the years. Another factor to consider when choosing the amount of life insurance to purchase would be any other costs your family could potentially face in the future upon your death.
 
Life insurance is a very important decision in every household. It is a financial decision; It is an emotional decision. Although the thought of purchasing insurance can make some families skeptical, uneasy and uncomfortable;  It is a decision that can give you the peace of mind knowing money would be available for you and/or your family in the future when an illness, or death occurs.  

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