Life Insurance Policies
Do You Need Life Insurance?
One never knows when tragedy may strike and a beloved member of the family dies. If you are the primary earner in your family and you pass away, how will your loved ones be able to maintain the lifestyle they are accustomed to living? Will your surviving spouse be able to keep the house? Will your children still be able to go to college?
Life insurance is a way of replacing the income lost when the insured is no longer around. The world is risky. No one expects to die tomorrow, but everyone will eventually die. People get incurable cancer and people are involved in fatal car accidents. Your life needs to be insured just in case the worst should happen.
Anyone who has financial responsibility for others should have a policy. Usually that means that your spouse and minor children will be the beneficiaries of your policy. However, you can name anyone you choose to name as a beneficiary.
Upon your death, the insurance company will need to be notified. Before any funds can be disbursed, a death certificate must be provided. Beneficiaries will have to sign some paperwork and then the face value of the policy will be distributed to one or more beneficiaries. The amount of the proceeds may be reduced by any expenses still owed to the insurance company.
You have a number of different choices when you want to insure your life. The two main types of insurance are whole life and term life. When you pay the premium on a whole life policy, part of the premium goes toward insurance and part of the premium goes toward savings. Generally, the premium on a whole life policy is lower when you are young and will rise as you age.
Term life policies are much more affordable than whole life policies because you are paying strictly for insurance. Like whole life, when you buy a new term policy, it is cheaper when you are young and healthy. Term life lasts for a specific period of time and your premium remains the same for the entire term.
A life insurance policy should be part of any complete financial plan. If you don't have one, maybe you should. Be prepared just in case the unexpected happens.
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