Life Insurance


Life insurance is an important part of your financial planning. Unfortunately, it can be an uncomfortable topic to talk about because it involves talking about your demise. Yet, if you are the primary breadwinner, you do not want to leave your spouse and children in financial distress after you pass away. A good life insurance agent can provide you with the proper information you need to know about life insurance so you can make the right choice for you and your family.

A life insurance policy is a contract between you and the insurance company. You agree to pay monthly premiums, and in return, the insurance company agrees to pay a death benefit to your beneficiaries when you pass away. This death benefit can range from a few thousand dollars to a million dollars or more. You can name just about anyone or anything as a beneficiary, including a spouse, children, other family members, friends, charitable organizations, and religious organizations.

There are two types of life insurance policies. A term life policy is the most basic type of policy and the easiest to understand. You pay monthly premiums for a term that usually lasts 5, 10, or 20 years. If you pass away during the term, then the insurance company pays a death benefit to your beneficiaries. You have the option of renewing the policy at the end of the term.

The other type of life insurance policy is a permanent policy. This policy provides coverage for your entire life if you pay the monthly premium. A permanent life policy accumulates cash value in an account that is like a savings account. Permanent policies are often used in estate planning to preserve wealth.

There are three types of permanent life policies, including whole life, universal life, and variable life. There are also several riders that you can add on to a term or permanent life policy, such as accidental death benefit, premium waiver, and accelerated death benefit. Be sure to talk to your insurance agent to find out which type of life policy and insurance riders are right for you.