Who Needs This Insurance
Life insurance policies are ideal anyone with financial debt. A mortgage, car payment or student loan are just a few examples of debts that a person is still required to pay even in the event of death. If a family’s breadwinner suddenly passes away, all of their debts are now due. The family can rely on life insurance policies to pay off these debts and remain financially afloat. This coverage can also have a balance afterward to cover future costs, such as the children’s college fees.
Even when there is no debt, life insurance can help one’s family to maintain their lifestyle without undue stress. The bottom line here is that life insurance is crucial for nearly every adult. Consider your personal finances and family needs to decide on the proper coverage for you.
Different Types of Coverage
Ideally, families should purchase a policy that covers their mortgage, other debts and additional amounts for future needs. Life insurance policies may be altered throughout a family’s lifetime to reflect current financial situations.
The most common types of policies are called whole and term life. Whole life policies pay out a death benefit but can also work similarly to a savings account in that the account grows over time. The policyholder pays a certain amount into the account each month, and they may borrow from the account for specific expenses, such as an illness or college education.
Term life policies have no savings or loan component. The policyholder chooses a specific term to be covered, say 10 years, along with a payout amount which will be most helpful to their family. If a death occurs during the specified term, the amount will be paid to the family after death. If death occurs even one day past the term, there is no death benefit paid – an important consideration.
With a good life insurance policy in place, family members are able to concentrate on helping each other through their grief when their loved one dies, rather than worrying about financial matters. Ample life coverage gives an entire family some financial comfort during their most difficult times.