A Basic Introduction To Life Insurance
Life insurance can be a confusing subject for many people, particularly when they are new to the process of buying a policy. Yes, it will be an added expense to the family budget, but there is no better financial decision that a person can make than the purchase of a life insurance policy that will provide protection to a family in case of the death of a breadwinner.
One kind of life insurance is labeled term life insurance because it only last for a term of time. This is the most inexpensive type of life insurance. The price will differ as to age, health status, and the amount of coverage that is purchased. It is important for high risk categories, like people with diabetes to look into term life policies. They will save you tons of money. By working with a company like Root Financial, who specializes in life insurance for diabetics and other high risk life insurance categories, you can get very good term life insurance.
A term policy is a good fit for a young family with children, as more coverage can be purchased for a small cost on a month-to-month basis. The family will receive the maximum death benefit for the cost, and the coverage can provide coverage for funeral costs, final expenses, mortgages, and monthly income. The term policy lasts for a set period of years, such as 10, 20 or 30 years. These policies do not accumulate a cash value and the death benefit expires at the end of the policy term.
The second form of life insurance is called whole life insurance, or permanent. Whole life covers individuals to age 100 as a rule, then pays the death benefit to the insured, if he or she is still alive. These policies also have a cash value, which the policy owner can borrow from the policy, or cash in by canceling the policy. The one disadvantage of whole life is that the coverage is less than can be obtained with term life insurance and the policies are more expensive than term life coverage.
If you are in the process of buying life insurance for the first time, or reviewing current coverage, be sure and work with a licensed life agent, as they are knowledgeable and can offer specific advice that pertains to your specific situation.