People often have many questions about life insurance, like who should get it, what kind is best, etc. The below information gives you a crash course in the basics of life insurance to help you better understand the options.
Life insurance basically serves two purposes – it helps insure individuals and families from the risks of an untimely death and it helps insure people who may outlive their income and savings. To assist in combating these risks, consumers have a number of life insurance options to promote peace of mind and financial security for themselves and their loved ones. The two most common types of life insurance are term and permanent. Term life insurance provides insurance for a specific period of time (term) and pays benefits owed under the policy to a designated beneficiary.
What are the benefits of term life insurance?
Cost
Most individuals who obtain coverage under a term life insurance policy do so because of its affordability. Large amounts of term life insurance can be obtained at low premium prices, which is appealing to those on a fixed income or who only wish to purchase life insurance coverage for a specific duration.
Coverage
Term life insurance is typically issued for a set period of time, such as 10, 20 or 30 years. The longer the period of time, the higher the premium rate/cost, and the coverage expires at the end of the term. Two good examples of when to obtain term life insurance are helping to pay for your children’s college education and helping to pay your mortgage in the event of your death. Parents often obtain a policy that expires after their children graduate from college to help pay for their children’s education in the event of the insured’s death. Secondly, the main breadwinner in a home could obtain coverage under a term life insurance policy that matches the length of his or her house’s mortgage.
Conversion
Some term life insurance polices can be converted to a permanent life insurance policy which often offers the advantage of cash value accumulation features. The ability to convert a term life insurance policy to a permanent life insurance policy can be a tremendous benefit to policyholders for a number of reasons. Individuals who hold a term life insurance policy and have medical problems, or have problems obtaining coverage due to age limitations are offered opportunities to apply to convert their term life insurance coverage to a contract offering permanent life insurance coverage without the need to undergo medical underwriting. Secondly, as financial needs change, conversion to a permanent life insurance policy can offer the policyholder a valuable savings tool should the need arise.
The bottom line is that no one enjoys thinking about death, but we do want to be sure our loved ones are protected financially should that need arise. At Preferred Benefits LLC we can help you do a realistic assessment of your current insurance portfolio, including life insurance. We can make suggestions that may save you money and in other cases even expand your coverage for the money you are currently spending. Such an assessment should be done annually.
Please contact us for a FREE assessment of your insurance portfolio. This personalized customer service is a cornerstone of our business. We look forward to being of service to you.
TOLL-FREE 877-302-5810
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