The Basics of Life Insurance
The goal of Life Insurance is to provide your loved ones with the financial security they will need if you were to die. This will help them pay off debt, maintain their standard of living, and manage other expenses. A life insurance policy can also ensure that they will not have to sell off assets or make other compromises after your death.
There are many different types of life insurance policies available, each with its own unique features and advantages. Your life insurance agent can help you decide which type of policy is right for your needs. However, all life insurance policies are designed to pay a death benefit to the named beneficiaries of your choice when you die. In addition, some life insurance policies build cash value, which you can withdraw or borrow against if you want to do so.
How much your policy costs will be determined by factors like age, health, policy type and coverage amount. In general, younger people typically pay less for life insurance than older people because they are less likely to develop a serious medical condition that could lead to higher premiums and/or a reduction in the death benefits.
It is important to read your policy thoroughly and understand the terms and conditions, including the death benefit, premium, cash values, and other information about the policy. It is also a good idea to review the policy with your agent every few years, as your needs may change over time.
Some life insurance policies come with a rider, which is an add-on feature to your policy that allows you to access the death benefit while still alive. This can be a great option if you have a terminal illness or another condition that will cause you to need long-term care or other medical services, which would otherwise require your family to sell assets or take on debt to pay for them.
Other riders available on some life insurance policies include child protection, which provides a death benefit to pay for the funeral and other final expenses of children under a certain age. These policies typically have lower coverage amounts and premiums than a whole life or universal policy, and they are available for a specific period of time.
Other special riders available on some life insurance policies are for parents of adult children with special needs. These allow the death benefits from a life insurance policy to be used to fund a trust that a fiduciary will manage for these children after the parent’s death. These policies can also help couples who own property together, as the death of one spouse could leave the other with a mortgage and/or other debt to pay off, and a life insurance policy can help them meet these obligations.