Understanding Life Insurance
Life insurance is complicated for many.
It's a difficult subject to discuss with your loved ones. The terms are confusing. The
types of coverage and costs vary from policy to policy, and the only one who really seems
to comprehend how it all works is...guess who? Your insurance agent.
But you can't avoid the inevitable. You have too much at stake. Your family's financial
security depends on the decision you make now. By taking the time to evaluate your life
insurance needs, you'll be able to protect your family's financial needs in the future.
You won't have to worry that mortgage payments, credit card bills, or school loans become
a burden for those left behind.
Life insurance basically let's you shift some of the financial risk and responsibility to
your insurance company. You pay the premiums. They assume the risk.
The bottom line: The more informed you are about life insurance, the better off
you'll be when it comes time to make a decision.
What is Life Insurance?
Life insurance is relatively simple. You make payments (premiums) to your insurance
company. When you die, your insurance company promises to pay a pre-determined amount of
money (death benefit) to your named beneficiaries. Your beneficiaries can use this money
to pay for your funeral or burial expenses, as a replacement for lost income, or to offset
estate taxes that result from your death.
What they do with the money is not as important as having it in the first place. That
part, however, is up to you.
Do You Need Life Insurance?
Yes, if others depend on your income for financial stability. No, if you
do not have any financial dependents. The key element to each situation is whether their
is a real "need". Dependent spouses, children, or parents all create a real
"need" for life insurance.