The Basics Of Life Insurance

In its simplest form, life insurance is a promise between an insurance company and you, the policy owner. If you pay a certain amount of money (premium) to the insurance company, the insurance company will pay a certain amount of money (death benefit) to the person (beneficiary) you’ve designated; this is the person that you tell us to add to your policy who will receive the benefits when you, the insured, passes on.

As you can imagine, there are many reasons you’d want to get life insurance. In the event of your death, your loved ones will be cared for. This is especially important if you are the primary job holder whose income the rest of your family relies upon. It’s also important for your children of any age, including those under 18 who are fully dependent on you, as well as those over 18 who are studying or just starting out in the world and may still be partially or fully depending on your income. Life insurance just makes sense.

Types Of Life Insurance

There are many types of life insurance available, and it’s helpful to have an insurance agent explain them to you in detail, complete with examples. We’ll cover just a few points here today. Contact us to ask any questions that you may have. 

Term Life Insurance

Term provides a death benefit only for a limited period of time.  Once the term expires, you either have to renew it for another term or convert it to permanent coverage.  You can also let it expire. 

Term life insurance policies provide a guaranteed death benefit, but other than that they have no value, unlike the savings value of permanent life insurance.  You use term life insurance against loss of life, but not for wealth or retirement planning

Because of the limits of coverage, term policies are usually lower than with permanent insurance. 

Permanent Insurance 

By contrast, permanent insurance can provide a death benefit and the potential to build policy cash value that you can access during your lifetime, using policy loans and withdrawals. Permanent insurance can also offer the flexibility to increase or decrease your death benefit as your needs change, as well as the potential to reduce or skip premium payments.

We’ve only touched the surface of what life insurance can do for you, what types are available, and what differentiates them. To learn more, make your appointment with Comfort Insurance & Finances today. We’ll be happy to go over all the plans available and explain what the different terms mean. Contact a life insurance expert today. 

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