Life insurance does not simply apply a monetary value to someone’s life. Instead, it helps compensate for the inevitable financial consequences that accompany the loss of life.
Strategically, it helps those left behind cover the costs of final expenses, outstanding debts and mortgages, planned educational expenses and lost income.
But most importantly, in the aftermath of an unexpected death, life insurance can lessen financial burdens at a time when surviving family members are dealing with the loss of a loved one. In addition, life insurance can provide valuable peace of mind for the policy holder.
Term insurance is a type of temporary life insurance policy that provides coverage for a certain period of time, or a specified “term” of years. 10, 20 and 30 year terms available. If the insured dies during the time period specified in the policy and the policy is active – or in force – then a death benefit will be paid. Some policies have a ROP (return of premium) rider. This is beneficial for the policy holder that wants to get a return of premium if the insured doesn’t die.
Sometimes referred to as “Whole Life” or “Straight Life”. Life insurance plans that do not expire (unlike term life insurance) and combine a death benefit with a savings portion. This savings portion can build a cash value – against which the policy owner can borrow funds, or in some instances, the owner can withdraw the cash value to help meet future goals, such as paying for a child’s college education.
Life insurance policies specifically designed for those who are 40-85 years old. Face amounts usually go from $2,000 to $30,000. Designed to cover “final expenses” like funeral costs. Planning for final expenses will help estimate the amount of life insurance needed and it will decrease the stress on survivors
Universal life insurance is type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance), which is invested to provide a cash value buildup. The death benefit, savings component and premiums can be reviewed and altered as a policyholder’s circumstances change. Unlike whole life insurance, universal life insurance allows the policyholder to use the interest from his accumulated savings to help pay premiums over time.
A permanent life insurance policy that allows policyholders to tie accumulation values to a stock market index. Indexed universal life insurance policies typically contain a minimum guaranteed fixed interest rate component along with the indexed account option.
(Accidental death and dismemberment) Accidental life insurance is an inexpensive way of obtaining life insurance coverage for yourself or someone else in your family. These policies typically pay a handsome death benefit to your beneficiary in the untimely event of your death, due strictly to an accident that causes death within a specified period of time.