Life insurance is designed to make life easier for your family members in the event of your death. When you pass away, your children, grandchildren and other members of your family receive a financial benefit that helps them get on with life, even when you are not around.
Types of life insurance
There are many types of life insurance policies you can purchase. The most common are:
Term Policy: This is the simplest form of life insurance. The policy only pays out if you die within the term of the policy, which is usually between one and 30 years. Two of the most common term life insurance policies are: concurrent and decreasing term. The tier term means that the benefits you should receive over the life of the policy remain the same, while the decreasing term means that the death benefits decrease over the life of the policy.
permanently: As the name implies, this policy pays you regardless of when you die. Even if you die at age 100, the policy will pay you. Similar to term life insurance, the permanent policy comes in different categories such as universal life, traditional whole life, and variable universal life. With the classic lifelong policy, the payment and premium in the event of death remain the same during the term of the policy.
The universal policy is similar to the traditional life insurance policy, but here you have the added benefit of higher income from your savings. With this insurance you can change the premiums, increasing, decreasing or even changing them as you wish. You can also change the amount for which you are insured.
Variable insurance offers you fixed premiums and you have the option to invest your money in stocks, bonds and other money market based investment options. This is where cash value and death benefits rise and fall depending on how your investment performs.
What you need to know about life insurance
While life insurance is designed to protect your dependents in the event of your death, you don’t have to wait until your death to benefit from it. With permanent insurance, you can use the amount you invest for any other purpose you want. You can use the amount you save to pay for college for your kids or yourself, finance your wedding, or fund a major home improvement project.
When you spend the amount, it is good to know that the amount you withdraw from the fund will be deducted from your savings. This results in a reduction in the benefits that would be transferred to your beneficiaries in the event of your death.
Here’s what you need to know about life insurance. There are many insurance companies where you can get the policy, but it is good to note that no two companies are the same. Before settling with any company, take the time to research the company and make sure it has a good reputation. You should also think carefully about the payment plans and the benefits you can get.