Life Insurance: What You Need to Know
Life insurance provides you with peace of mind while you’re still alive and financial support for your loved ones after you’re gone. It is something you should have if you have people who rely on you for day-to-day expenses, college tuition, or retirement income. Here are some frequently asked questions to help you make an informed decision.
What Is Life Insurance?
A life insurance policy is a legal agreement between an insurer and a policyholder. In exchange for the premiums paid by the policyholder during their lifetime, a life insurance policy guarantees that the insurer will pay a sum of money to named beneficiaries when the insured dies.
Which Life Insurance Is the Best?
There are various policies, but there are two broad categories of life insurance: term life and whole life. The best option for you is determined by your needs and maybe a combination of products.
Why Is Life Insurance Important?
One of the main reasons people buy life insurance is to have peace of mind knowing that their loved ones will be taken care of if something happens to them. Without a policy, your spouse, children, or anyone else who is financially dependent on you, will be left without support.
What Is a Beneficiary?
A beneficiary is a person, a group of people, or even an entity, such as a charitable organization, who receives the proceeds of a life insurance policy upon the insured person’s death.
How Much Does Life Insurance Cost?
The cost of life insurance varies greatly depending on several factors. Your monthly premiums are affected by your age, gender, health, lifestyle, driving record, and occupation.
Life Insurance may seem daunting, but it is simply a legally binding contract you and your insurance company have. Your insurance company provides a lump-sum payout, commonly known as a death benefit, to your specified beneficiaries in exchange for monthly or annual payments.