Life Insurance

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The Ins and Outs of Life Insurance


Obtaining good life insurance is something few people think of until they start a family and purchase their own homes. However, all can greatly benefit from life insurance even when young, healthy and single. In these cases, it certainly can be helpful should death unexpectedly strike leaving your family holding the bag for paying funeral and burial costs. So, though it is unpleasant to ponder one’s own demise, it’s wise to plan your future so loved ones are not given the burden of dealing with the costs you have left behind.

Life insurance can also be exploited as a part of one’s financial planning. Insurance can come in quite handy in replacing a breadwinner’s lost income should he or she suddenly pass away. It’s not unusual to obtain adequate coverage so as to replace after-tax income until one’s children become adults. It can also be helpful in doing such things as putting one’s children through college, paying off a mortgage and more.

Term Insurance

Term insurance is, as the name suggests, coverage that lasts only for a specific amount of time, often in 15-year increments. For many this is the ideal choice as it less expensive than the alternatives and can help loved ones easily deal with funeral costs and so on. Term insurance functions just like homeowner or automobile insurance. You are responsible for paying your insurance premiums and, in return, you enjoy coverage. If you die (within the covered period) the names beneficiary is then paid out a death benefit. The policy will expire either after you stop paying premiums or when the “term” of coverage ends.

How it Works

When one applies for insurance, a form is completed in which one’s basic information, such as age, sex, weight, whether or not you smoke, etc., are provided. Then the applicant is asked to choose how much coverage he or she would like and for how long a duration. Talk to an insurance professional for more details.