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Life Insurance- Understanding The Basics
Life insurance isn’t a fun thing to think about, and it may seem like an unnecessary expense. But if you have people who depend on you for financial support, then life insurance is really about protecting them in case something happens to you – your designated beneficiary would collect a financial benefit upon your death. Life insurance can be confusing, so here’s a rundown of the basics. Remember you could never replace a life of your loved one- you are replacing income.
Get the Right Coverage
Innovative Insurance Solutions: Term Life Insurance, and several types of Permanent Life Insurance Term Life Insurance for temporary simplified coverage and no cash value. Whole Life Insurance for permanent coverage, with guaranteed premiums, death benefits and cash value growth. Universal Life Insurance for permanent coverage, flexibility and less emphasis on cash value. Variable Universal Life Insurance for permanent coverage, and potentially higher cash value through investment options, but you accept some risk. Survivorship Life Insurancefor lifetime protection for two people that pays a benefit upon the passing of the surviving insured.
How Much to Buy?
Many people decide based on an income replacement calculation, between 5 and 10 times the amount of your current income. Think about your personal circumstances: Is yours the sole income in your household? Are there other expenses, such as college tuition, that may arise in the future? Don’t forget to include potential medical and funeral costs. Above everything, you want to be sure your family does not get stuck with bills, debts or expenses that they cannot afford. Depending on your needs, you may want to consider buying supplementary coverage beyond what offers.
Why Purchase Now?
Life insurance gives you the peace of mind you only get from knowing that you’ve protected your loved ones.
Buying life insurance may seem unmanageable right now, but it could be a smart decision. Unlike many other benefits, life insurance is actually more affordable right now than in the recent past. Plus, during this tough economic period, ensuring that your family will be financially secure in the future is more important than ever. In the event of your passing, life insurance provides money directly to your beneficiaries. They can use the money for whatever they want, such as:
- Make up for your lost income
- Fund your child’s education
- Paying off household debt
- Paying for your funeral and other related expenses