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Life Insurance

Good Life Insurance

If one were to die unexpectedly, he or she would likely desire that the family left behind be financially secure. Having a quality life insurance policy helps to accomplish this.

What is this Coverage?

A life insurance policy varies from other insurance policies in one important way. Instead of providing benefits to you, this coverage will usually provide benefits to someone else after you pass away. There are some variations of these kinds of policies that provide limited benefits while you are alive, but the big benefits of a life policy is to pay out to one’s beneficiaries after death.

Who Benefits from this Coverage?

A life policy can be a terrific part of anyone’s financial planning regimen. However, it is most important for those who have others dependent upon them financially. This might be a parent, a person with a husband or wife who doesn’t work or someone who takes care of a vulnerable family member.

How Does it Function?

Life policies have a set death benefit and they pay out a lump sum to the beneficiary or beneficiaries who are named in the policy once the insured person has died. In some cases, some policies may provide living benefits to the insured person while he or she is still alive. If these benefits are used, they are subtracted from the death benefit. Life policies, like other insurance policies, can have exclusions, which mean they won’t pay out if death is caused by, for instance, suicide.

Different Kinds of Policies

There are two main types of life insurance: term and permanent. Term policies provide you a set amount of coverage for a set time period, say 30 years. If you die within the term period, the policy pays out. If you don’t, the policy expires. Permanent insurance stays in force for as long as you pay your premiums. It is further broken down into categories, such as whole life, universal life and variable life.

Big Benefits

The major plus to having a policy from a life insurer is the potential for a payout to your loved ones after your death. Building cash value in certain policies is also a terrific advantage.