Life Insurance

We seldom like to think about death much less discuss it, but it unfortunately happens to everyone. Losing a loved one is bad enough, but it’s worse if they’re saddled with funeral expenses, unpaid debt and the prospect of little to no income. Life insurance can be a way to lighten the load for family members.

Life insurance is a type of insurance that provides money to your spouse, parents, children or whomever you choose to be your beneficiary when you die. You designate not only who gets the money but also the amount, which is referred to as the death benefit. Your beneficiary can use the money for funeral expenses or however she or he sees fit.

When you first purchase the insurance policy, you determine how much you want your death benefit to be and who you want as the beneficiary. In exchange for this insurance, you will pay a premium, which may be paid monthly, quarterly or annually. The amount of your premium is based on the amount of your death benefit, how often you choose to pay and the type of insurance you purchase. There are a couple different kinds of life policies available.

Whole life is the most expensive type, and you pay it your whole life. In addition to offering a death benefit, it also has a cash value that you can borrow against. You can pay back the money or have it taken out of the value of the policy. The premiums often change.

Term life is less expensive than a whole life policy, but it’s only for a certain term, which may be anywhere from five to 30 years. The premiums stay the same throughout the term. When the term is up, you need to purchase a new policy, typically at a higher premium because you’re older.

Universal life, the most expensive type, is almost a combination of the above two. It offers flexibility in that you can adjust the term, premium, death benefit and cash value as you see fit.

Purchasing an insurance policy is beneficial to not just your peace of mind but also for the security it can offer your family members.
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