Life
Life insurance covers your family's
needs in the event of your death, from funeral expenses to ongoing financial
requirements. There are several types of life insurance that offer different
coverage and payment options. Life insurance is for the living!
Before you decide which works for you best, you should know:
How Life Insurance Is Typically Used:
For any immediate needs at the time of death, such as final illness expenses,
burial costs and estate taxes. For funds for a readjustment period, to finance a
move, or to provide time for family members to find a job. For ongoing financial
needs, such as monthly bills and expenses, day-care costs, college tuition or
retirement
Term Insurance
Term insurance provides coverage for a specific period of time. It pays a
benefit only if you die during the term. Some term insurance policies can be
renewed when you reach the end of the specific period. Others give you the
ability to reenter. The premium rates increase at each renewal date or each
re-entry. Many policies require that evidence of insurability be furnished at
re-entry for you to qualify for the lowest available rates.
Initially, premiums are generally lower than those for permanent insurance,
allowing you to buy higher levels of coverage at a younger age, when the need is
often the greatest.
Whole Life
This is the most common type of permanent insurance. The premiums for a whole
life policy must be paid as scheduled in the amount indicated in the policy.
These premium amounts remain constant over the life of the policy. The death
benefit and cash value are guaranteed as stated in the policy if premiums are
paid when due and there are no loans or withdrawals outstanding at the insured's
death. Quite often dividends may be credited to this type of policy.
Universal Life
This variation of permanent insurance allows you, after your initial premium
payment, to pay premiums at any time, in virtually any amount, subject to
certain minimums and maximums. You can also increase or reduce the amount of the
death benefit more easily than under a traditional whole life policy. Typically,
current interest rates are credited to the cash value in this type of policy.
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