Life Insurance

If you were to suddenly die, would your family have enough money to survive? If a loved one died, would you be able pay for funeral expenses? Having a good insurance policy can’t bring back a loved one but can take some of the financial burden away. Learn more about this valuable insurance.

Life insurance provides money to your beneficiary, typically family members, in the invent of your death. This amount the beneficiary receives, known as a death benefit, is based on the amount or face value of your policy you’ve chosen. Beneficiaries can spend the death benefits any way they see fit. The premiums can be paid monthly, semi-annually or annually. The premiums or amount you pay depends on the death benefit and type of policy.

A whole life policy is one that requires you pay all your life. It’s expensive but has a cash value that increases through the years in addition to the death benefit. The policy holder can also borrow money against the policy as long as it’s paid back. If it’s not paid back, it will decrease the amount of the death benefit. The premiums on whole life policies may go up or down.

A term life policy, as its name states, goes for a specific term, which is determined at the time the policy is taken out. The terms may be 5, 10, 15, 20, 25 or 30 years. Unlike a whole life policy, term policies only pay a death benefit. The premiums do not generally increase on term policies.

A universal life policy is similar to a whole life policy with with more flexibility. Sometimes circumstances in your life or financial situation change. Universal life policies allow you to make changes to the terms, death benefit and premiums if need be. This is the most expensive of the three policy types.

Although the major benefit of of life insurance is to pay for burial and funeral expenses, many people purchase policies with large death benefits so the survivors have enough cash to continue to live in the same style they’ve become accustomed. This is particularly true with the bread winner of the family.