Understanding what life insurance is and how it works will help you determine what type of policy you need as well as how much coverage will be sufficient. Not everyone will benefit from term life, just like not every person will need $100,000 or more in coverage. The following guide will make things a little easier to understand.
What Is Life Insurance?
A life insurance policy is a written agreement between an insurance carrier and a customer that states as long as premiums are paid and the terms and conditions are followed, a death benefit will be paid to the customer’s estate or heirs upon their death.
Types of Life Insurance
There are many types of life insurance you can purchase that will accommodate most needs. Both short-term and long-term policies are available, so you can purchase the amount of coverage you need for a specific amount of time. Some policies are considered temporary, while others are more permanent in nature.
Term Life Insurance Plan vs. Permanent Life Insurance Plan
Term life policies are meant to provide coverage for a specific amount of time, usually five, ten, 15, or 30 years. Permanent policies are meant to be in place for the rest of your life. Temporary policies are often considered if you only need to cover certain expenses like a loan or mortgage. A permanent policy is more for supporting your family if your death deprives them of your income.
How Much Life Insurance Coverage Should You Buy?
To determine how much life insurance to buy, you will need to know what bills will need to be paid after you pass away. Also, you’ll need to understand how much money it will take to secure your family’s financial future if they no longer have access to your income. Additionally, if your health improves, you can request a change in risk class, which can impact your premiums and coverage.
Related Read: 8 ESSENTIAL STEPS FOR PURCHASING A LIFE INSURANCE POLICY
Benefits of Life Insurance
There are several benefits to having sufficient life insurance coverage. Your debts will be paid without taking money away from your family. If you have a family to support, the death benefit gives them the financial support they will need to be able to survive without your income.
Who Needs Life Insurance?
Anyone who has financial obligations to creditors or has a family to support should invest in a life insurance policy. If you are financially secure with no outside obligations, there would be no need for a life insurance policy.
What Affects Your Life Insurance Premiums?
Several things can affect your life insurance policy’s premiums. They include your age, general health, credit score, and the amount of risk posed by your occupation and your hobbies.
What Are the Benefits of Life Insurance?
The primary benefit of a life insurance policy is the death benefit paid to your family after your passing. They can pay any outstanding debts and prepare for a future without your income. Some policies also offer options where you can take advantage of the cash value or equity that you have built up in your policy.
How Do You Qualify for Life Insurance?
To qualify for some types of life insurance, you will be required to take a physical exam. If you apply for a policy while you are still young, the need for a physical may be waived.
How Does Life Insurance Work?
Life insurance in Vancouver, WA and Portland, OR, is rather simple in how it works. Once you have applied and are approved, you will need to pay your monthly premiums and abide by the terms and conditions. As long as your premiums are current when you pass away, your beneficiary can file a claim against your policy after you pass away and collect the death benefit.
Everyone has access to life insurance. It’s up to you to know your needs and what type of policy will work best for you. If you still have questions, call the agents of Action Insurance Group in Portland, OR, or Vancouver, WA. We have the answers you are looking for.
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