Do You Need Life Insurance?|2021

 

Do You Need Life Insurance?

What is Life Insurance? Life insurance is basically a contract between you as an insurer and an insurance firm. Essentially, in return for your monthly premium payments, the insurer will pay out a regular sum called a death benefit to the beneficiaries once your death is announced. This payment is made on a weekly, bi-weekly or monthly basis, depending upon what types of life insurance you have chosen.

So, what is Life Insurance, really? When you purchase a policy from your chosen insurance provider, the insurer will promise to pay your beneficiary a sum called the "cash surrender value". Your beneficiary will be the person, or group of persons, who will receive the funds after you die. The amount of cash surrender value is dependent on the types of Life Insurance you have chosen and also depends on the policies age at the time of purchase.

Choosing the best life insurance policy type will depend greatly on how much coverage you need, as well as what kind of death benefits you prefer. There are basically three types of Life Insurance policies; Term Life Insurance, Whole Life Insurance, and Variable Life Insurance. Each one has different features, as well as benefits and costs. To learn more about these, it may be useful to review the following chapters, which provide general information only, not medical advice:

Term Life Insurance is the simplest type of Life Insurance. This is purchased by securing a policy for a specific period of time, such as one year. In return for the premium payments made, the insurance company guarantees that the death benefit will be paid when your insured demise takes place. This ensures that there will be no financial pressure when the insured dies unexpectedly. Premiums are generally low, but may increase as the beneficiary ages. As with other Life Insurance policies, early death will result in lower premium payments.

Another type of life insurance policy type is Whole Life Insurance. This is an investment-type policy where all the payments made are interest accruing until the policy holder dies. As with Term Life Insurance, premiums are generally low for this policy type. If you are young, you may want to consider this option since it is less expensive than many other options available to people of a young age. However, people think that Whole Life Insurance is more expensive than some others available to them.

Variable Life Insurance is another option that people may consider. This option allows you to make adjustments to the payment settings on your policy throughout the life of the policy. For example, you may decide to increase the income replacement for your beneficiary or reduce the income replacement amount. You may even wish to increase or decrease your death benefit. The choices available to you with variable life insurance coverage may seem confusing, but if you are familiar with the basics of life insurance, you should be able to make decisions about this type of policy easily.

If you want a policy that offers flexibility, you should consider Whole Life Insurance. With Whole Life Insurance, you choose exactly how much money you want to be paid after your death and your beneficiaries will receive that amount. This type of policy provides flexibility through the use of a lifetime benefit that is paid to your beneficiaries until such time as you have left enough money for them to live on. While this type of policy may seem confusing to some consumers, it is often easy to understand and simple to manage. As with other types of life insurance coverage, you can adjust your payment settings to your needs throughout your life.

Most people think that Term Life Insurance is the best choice for them when they are young and healthy and should not cost as much as Permanent Life Insurance once they become older. However, you can often get a better rate by purchasing a Term Life Insurance policy than a permanent one. Term Life Insurance policies can be renewed for additional terms or at any time you wish, and will remain in effect until the term has expired. While many people think that the premium for a Term Life Insurance policy makes it unappealing, in some cases it can actually save you money by providing you with an additional level of protection for your loved ones after you die. Therefore, before you purchase Term Life Insurance you should be aware of its different features and decide whether or not you need life insurance.