Did You Know?
There are multiple types of life insurance policies and understanding the differences between them is essential in making the right choice. Which type of policy you choose will depend on how you imagine it being used, so keep that in mind when you’re researching.
Term Life Insurance
Term life insurance is one of the most affordable options out there. It provides coverage for a certain amount of time. In order for the death benefit to be paid, the death must occur within that time frame. The death benefit is tax-free and intended to make up for the money that you would bring in otherwise.
Many choose to purchase a term life insurance policy if they’ve got a young family. Those with young children often want to make provision for the time during which they’re minors. Term life insurance is the best way to be sure your family would be taken care of financially when they need it most.
Premiums are paid on a regular basis. Some policies have a monthly premium, while others will charge yearly. Paying the premium is important and failing to do so could jeopardize your life insurance policy. A typical term life insurance policy can last anywhere from 10-30 years. How long you choose will most likely depend on those that you’re close to and wish to provide for.
Premium cost will increase as the death benefit does. If you’re looking for a death benefit that’s in the million-dollar range, be prepared to pay accordingly. However, most term life insurance policies are incredibly affordable.
If you have health problems, then you may need to pay more for your policy. This will depend on the individual insurance agency you work with, so look around in your area and learn more about the options available.
Spending the Death Benefit
There are no stipulations about spending the death benefit. While many use it to cover funeral costs and other such expenses, it can be used at the discretion of the beneficiary.
If you’re anticipating leaving behind debt, a life insurance policy can make sure it is not a financial burden on your family, as they can use the death benefit to pay for your remaining costs. Student loans and credit card debt can be financially significant, so purchasing a life insurance policy is one of the best ways to cover those costs.
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