Understanding Life Insurance
Life insurance is basically a contract between an insurer and an insurance provider, in which the insurer pledges to pay out a designated amount of cash to an insured party, on the demise of that insured individual, for a specified period of time. The premium paid by the insured amounts to a lump sum, known as the face value of the policy. This sum of money is held by the insurer, and in case of the insured's death, the insurer then repays the amount owed to the policy holder through monthly premiums. The amount that is due depends on several factors, such as the age of the person insured, the policy amount, the premium paid by the insured, and the policy holder's health at the time of death. Most commonly, term life insurance policies last for the lifetime of the insured only, but there are special life insurance contracts with additional provisions for variable life insurance policies. For more tips on helping your dollars, click here.
Variable life insurance contracts allow the premium payments to vary with the fluctuations in the values of financial markets. The term of the life insurance contract usually extends until the person who insured has reached the age of ninety-five years old, or until death. In some cases, however, the life insurance company may elect to end the contract early, before the insured gets to this age. The premiums paid by the insured will then be refunded to the beneficiaries upon death or within a specified period of time after death, depending on the contract. The beneficiaries will then use the lump sum obtained from the premiums to buy life insurance of their own.
Some people purchase additional insurance coverage for their families in the event of their deaths. This helps cover the funeral expenses and allows the family to pay for the mortgage on the house, provide for the education of the children, pay for the home maintenance and other expenses, etc. It is very important that you carefully review the needs of your family, prior to purchasing life insurance coverage. Also take into account your personal situation, and your ability to make large deposits into an insurance trust, should you die. This will help cover your loved ones' funeral expenses, as well as other unforeseen bills that are not considered to be part of the basic policy. To know when is the time to rebound, visit this website.
Some life insurance contracts also allow the beneficiary to choose between term and whole life insurance. Term insurance lasts only for a pre-specified amount of time, while whole life insurance covers the insured's entire life, and is usually sponsored by employers and secured by stock certificates. If an insured dies during the term of the policy, his/her dependents receive the death benefits before the maturity of the term. If the insured had insured his whole life, his survivors would receive the full death benefits.
A life insurance policy could help cover many problems and solve many problems. For example, if your spouse had several credit cards, and you were able to prove that they each had less than the fair market value balance, then you might be able to divorce and get half of the money you owe them. Or, if your spouse was currently paying off outstanding student loans, then you could use the cash payment to pay those loans. Or if your spouse were supporting you through your college years and you had considered paying off your first house on a line of equity that gradually increased, then a life insurance policy could help you out.
But don't think that just because you've lived this long you don't have any children, or that you don't need to worry about any potential problems. If you're planning ahead, you'll be better prepared to deal with unexpected problems, and to help your family deal with them when they arise. Life insurance isn't just something that old people sell for charity. It is one of the most effective financial tools available and should never be ignored.
Read more at http://www.huffpost.com/entry/life-insurance-facts-need-know_l_5d2c00c5e4b0060b11eebd78.
Variable life insurance contracts allow the premium payments to vary with the fluctuations in the values of financial markets. The term of the life insurance contract usually extends until the person who insured has reached the age of ninety-five years old, or until death. In some cases, however, the life insurance company may elect to end the contract early, before the insured gets to this age. The premiums paid by the insured will then be refunded to the beneficiaries upon death or within a specified period of time after death, depending on the contract. The beneficiaries will then use the lump sum obtained from the premiums to buy life insurance of their own.
Some people purchase additional insurance coverage for their families in the event of their deaths. This helps cover the funeral expenses and allows the family to pay for the mortgage on the house, provide for the education of the children, pay for the home maintenance and other expenses, etc. It is very important that you carefully review the needs of your family, prior to purchasing life insurance coverage. Also take into account your personal situation, and your ability to make large deposits into an insurance trust, should you die. This will help cover your loved ones' funeral expenses, as well as other unforeseen bills that are not considered to be part of the basic policy. To know when is the time to rebound, visit this website.
Some life insurance contracts also allow the beneficiary to choose between term and whole life insurance. Term insurance lasts only for a pre-specified amount of time, while whole life insurance covers the insured's entire life, and is usually sponsored by employers and secured by stock certificates. If an insured dies during the term of the policy, his/her dependents receive the death benefits before the maturity of the term. If the insured had insured his whole life, his survivors would receive the full death benefits.
A life insurance policy could help cover many problems and solve many problems. For example, if your spouse had several credit cards, and you were able to prove that they each had less than the fair market value balance, then you might be able to divorce and get half of the money you owe them. Or, if your spouse was currently paying off outstanding student loans, then you could use the cash payment to pay those loans. Or if your spouse were supporting you through your college years and you had considered paying off your first house on a line of equity that gradually increased, then a life insurance policy could help you out.
But don't think that just because you've lived this long you don't have any children, or that you don't need to worry about any potential problems. If you're planning ahead, you'll be better prepared to deal with unexpected problems, and to help your family deal with them when they arise. Life insurance isn't just something that old people sell for charity. It is one of the most effective financial tools available and should never be ignored.
Read more at http://www.huffpost.com/entry/life-insurance-facts-need-know_l_5d2c00c5e4b0060b11eebd78.
