GOT LIFE INSURANCE? WHAT YOU SHOULD KNOW
Life insurance is a popular type of insurance that has served a lot of families in their time of grief. When a person who owns a life insurance dies, their loved ones will immediately receive monetary payment. This is made possible through the listing of a beneficiary in the process of obtaining the life insurance. This life insurance is paid to the beneficiary tax free but it will be taxed in the case the beneficiary is a trust or an estate.
TYPES OF LIFE INSURANCE
(1) TERM LIFE INSURANCE
(2) PERMANENT LIFE INSURANCE
TERM LIFE INSURANCE
Term life insurance is a conditional type of life insurance which works within a time frame, unless the person fails to meet up with their premium payment. Also, term life insurance is not as costly as permanent life insurance. A person can buy a premium for a given number of years and if they die within that time frame, a death benefit will be awarded to their beneficiary.
PERMANENT LIFE INSURANCE
This aspect of life insurance runs all through the life duration of a person and can only be inactive when the person stops paying the required premiums. The premiums to be paid in permanent life insurance is normally on the high side compared to the term life insurance premiums. Though this is expected to reduce as the years go by.
Permanent life insurance has two major examples and they are whole life policies and universal life policies.
WHOLE LIFE INSURANCE:
This insurance works to secure your premium amount. It ensures that there will be no alterations done on your premium even as you age and a minimum cash value will exist on your policy. Every benefit due you will be paid such as death benefit.
UNIVERSAL LIFE INSURANCE:
This type of permanent life insurance unites investment account with life insurance. The investment account may be used to access loans and to also perform withdrawals. This insurance makes it a possibility to either increase or decrease a person’s premium along the allowed limits as stated in the insurance policy.
LIFE INSURANCE WORDS
As you investigate life insurance to know more about it, you will definitely come across words like these:
This is the person or persons to which the death benefit will go to upon the death of the insurance owner. The owner of the policy can decide to swap the beneficiary as they please without having the need to consult the previous beneficiary first.
This describes what you stand to gain once your claim has been approved by the insurer.
INSURANCE CASH VALUE:
This is the amount of money the policy holder is entitled to when the insurer cancels a life insurance policy. This goes hand in hand with permanent life insurance. The cash value can also be incorporated into the insurance policy’s face value and subsequently disbursed, upon the death of the policy owner, to the beneficiary.
When a person takes up a life insurance, it is to provide coverage for the persons family upon their death. It can be seen as a gift to their loved ones who may also be referred to as the beneficiaries. For everyone who desires the well being of the family they will leave behind up their demise, life insurance is a good investment. Think about it.