For those who are newlyweds or new parents then life insurance is an often approached subject. Should you buy life insurance or not? The answer is one for you to decide at the appropriate time. Given the relatively low expense of many life insurance policies, you might decide that it is a worthwhile investment that you want to make. Here is some great information to help you along the way of your decision.
What is life insurance?
Life insurance is, fundamentally speaking, a way to financially protect your family in the event of a death to a primary money maker in the home. You will enter into a contract with a life insurance company and pay a monthly or annual "premium" or payment. In exchange for your payment, the insurance company will agree to pay a "death benefit" to a person of your choosing should the insured individual die at any time while the policy is in tact. You can choose who you want to be insured under the policy, as well as who you'd like to make the beneficiary of the policy. It's that simple.
Life insurance is often thought of as a great way to take care of things like mortgages, educational expenses for your children, medical bills, funeral costs and other general living expenses that will need to be accounted for in the event of a death.
What kind of policy should I choose?
Generally speaking, there are two different kinds of life insurance policies to choose from. The first is known as "Term Life" and is the most basic form of life insurance available. With a term life insurance policy, the insured will only pay for the insurance for the specified amount of time. This could be ten, fifteen, twenty years or more depending on the policy. With a term life policy, annual payments can go up or down and when the policy expires you will have no more coverage from the insurance company. This is also the most affordable kind of life insurance policy.
The other kind of life insurance is known as "whole life", which along with the benefit of the insurance, the owner of the policy will also own an investment account. Whole life insurance is more expensive than term life insurance because a large part of your annual payment is invested into a series of funds that will gain interest over time. Whole life policies don't have an end date and payments will not fluctuate.
Life insurance can be a valuable asset to your family, however, when considering any life insurance decisions make sure you consult the advice of a professional financial advisor.
To learn more, contact a life insurance company like Guys Insurance.