• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • HOME
  • ABOUT

The Fortunate Investor

Investing, Business, Saving, Debt, Money, Retirement, Taxes and Family Finances

  • Business
  • Invest Your Money
  • Save Money
  • Get Out of Debt
  • Make Money
  • Family & Money
  • Taxes
  • Retirement
    • Retirement Calculator
You are here: Home / Saving / How to Better Understand Life Insurance Policies

How to Better Understand Life Insurance Policies

September 30, 2021 By The Fortunate Investor | This article may contain affiliate links. For more information visit our Disclosure

Tweet
Share
Pin
Share
Share

How to Better Understand Life Insurance PoliciesMost times, having a conversation about life insurance can seem very morbid. Who likes talking about death? But you must have that conversation so that you can keep your family safe.

What’s worse is that not many people understand life insurance. Well, here’s a quick guide to help you navigate this conversation so that you don’t have to worry about the future of your family if you pass away.

Table of Contents

  • What is Life Insurance?
  • The Different Types
    • Term Life Insurance
    • Permanent Life Insurance
  • Why You Need Life Insurance
    • To Keep Your Family From Going Under
    • To Help Pay Final Expenses
  • Understand Life Insurance

What is Life Insurance?

Life insurance is an agreement made between you and your selected insurance provider to issue tax-free lump sums of money to your acknowledged beneficiaries in the event of your death if the policy is active. This is called a death benefit.

By paying your monthly premiums, the insurance makes sure your family is covered by the lump sum, depending on how much the sum was agreed upon.

The Different Types

Several main types of insurance can be utilized for your life insurance. Choosing the best one for your situation could be the difference between your family surviving or suffering after your passing.

Term Life Insurance

A term life insurance has several stipulations. The first is that it pays the death benefit to your beneficiaries only if you pass away during the policy term. So the policy must be active, and it only pays until you turn 95.

Unfortunately, the policy has no value at the end of its term.

Permanent Life Insurance

Unlike the term life, the permanent life insurance policy pays the death benefit to your beneficiaries no matter what as long as the policy is active. SO if you passed away prematurely, your family wouldn’t have anything to worry about.

It also includes a savings feature alongside the death benefit and can accumulate cash or loan value you can withdraw, borrow against, or invest if you so choose.

Why You Need Life Insurance

Life insurance isn’t mandatory to have. But there are several reasons you should consider it as you get older and have a family:

To Keep Your Family From Going Under

Families often are hit hard by someone’s passing, especially if that person is a contributor to the financials of a household. It can be difficult to stay afloat when depending on multiple incomes.

The death benefit payout makes the burden easier on the family, and they can use it in any way they wish as long as it passes the 7-day test. for more information on that, go to paradigmlife.net/blog/understanding-modified-endowment-contract-mec/

To Help Pay Final Expenses

Another difficulty is just paying for funeral and final expenses.

The median cost of a funeral is almost $8,000. Unfortunately, most Americans don’t have that kind of money saved up to handle such a large expense on top of outstanding debts.

Life Insurance policies are created to help with these sorts of expenses as well.

Understand Life Insurance

Although it might be difficult to understand the hardships of death, it’s not hard to understand life insurance. Your family should be safe if you have to leave them.

Leave your family some support, consider getting life insurance today.

For other informative articles like this one about insurance, be sure to browse the rest of your blog.

Primary Sidebar

Popular Articles

Essentials Steps to Prevent Standards Dropping Among Your Employees

6 Essential Steps to Prevent Standards Dropping Among Employees

Work standards slipping among your employees is a risk that you need to consider. Standards don't … Read More about 6 Essential Steps to Prevent Standards Dropping Among Employees

10 Tricks To Reduce Abandoned Shopping Carts

10 Tricks To Reduce Abandoned Shopping Carts

Your online store is getting visitors. And these visitors are adding items to their shopping carts. … Read More about 10 Tricks To Reduce Abandoned Shopping Carts

Five Marketing And Advertising Updates To Make In Your Business This Year

Five Marketing And Advertising Updates To Make In Your Business This Year

As a business, marketing and advertising efforts need to be consistent in their success and while it … Read More about Five Marketing And Advertising Updates To Make In Your Business This Year

13 Effective Ways To Empower Your Employees

13 Effective Ways To Empower Your Employees

Employees are crucial to any business’s success; empowering them is essential for your company’s … Read More about 13 Effective Ways To Empower Your Employees

6 Mistakes First-Time Buyers Need To Avoid

6 Mistakes First-Time Buyers Need To Avoid

Getting a mortgage approval isn't as simple as applying for a personal loan. First-time buyers can … Read More about 6 Mistakes First-Time Buyers Need To Avoid

Footer

TOPICS

SAVE MONEY
INVEST MONEY
REDUCE DEBT
MAKE MONEY
FAMILY & MONEY
TAXES
START A BUSINESS
RETIREMENT

THE FORTUNATE INVESTOR

ABOUT US
ADVERTISE
CONTACT US

The Fortunate Investor focuses on personal finance topics to build wealth. Topics include saving money, investing, managing debt, family and money, taxes, making money, college planning, starting a business, coupons and retirement.

SOCIAL MEDIA

FACEBOOK
TWITTER
PINTEREST
YOUTUBE

Copyright © 2023 Fortunate Investor. All Rights Reserved. | Disclaimer & Disclosure | Privacy Policy | Terms of Service