Life Insurance

Under life insurance policies, there are two primary players: Insureds and beneficiaries.

• Insureds are the parties who insure their lives. If this is you, then you will attach a value to your life. In your life insurance policy, this sum will be called a death benefit. If you die while you have life insurance, then your insurer will pay out this death benefit.
• Beneficiaries are the people who receive the death benefit from the insured’s life insurance. The beneficiary might be a spouse, adult child, close friend or even a charity of your choice.

Even if you have saved well, that doesn’t mean that hardships can’t still beckon when you die. That’s why life insurance is designed to help your loved ones continue to support themselves even if you are no longer around to provide an income yourself.

A carefully designed policy can substantially reduce your survivors’ financial burden. The death benefit might help them pay for a variety of costs, including:

• Funeral bills or other final expenses
• Mortgages, car payments or other debts
• Targeted costs like a child’s school tuition or a disabled relative’s long-term care costs
• Everyday living expenses

What’s more, you can often set rules on how a life insurance payout is to be used. By naming a trust fund as your policy’s beneficiary, you can control where the plan’s money goes. The rules of the trust will limit its use to approved expenses.

There are two primary types of life insurance:

• Term Life Insurance: These plans only offer coverage for a certain number of years. For example, a 20-year term plan will only be active for 20 years. If you do not die during this term, then your plan will expire at the end. You must apply for new coverage to continue the benefits.
• Whole Life Insurance: A whole life plan lasts from the time of enrollment until the end of your life. It will only expire if you fail to pay your premiums. Besides a death benefit alone, a whole-life policy will also offer cash-value investment opportunities. With a cash value option, a portion of your premium is invested into a savings account that accumulates value over time. You can then draw on this investment as a source of income during your own life.

More specific policy options such as universal, guaranteed issue and group life plans also exist.

Our agents are happy to help you establish the plan that provides the most appropriate financial framework for your future. You can even buy several life insurance policies on yourself at once. Some policies can expire at different times. They will have served their purposes, but you will still have other benefits available.

Term life plans are generally more affordable than whole life policies. However, remember that term life plans expire if you don’t die during the policy term. Therefore, if you must reapply for another policy, then you might not pay as low a premium as you did previously. So, if you want more flexibility out of your plan, then you might find a whole life policy more to your advantage.