The Basics of Life Insurance
Insurance Quotes Basics from Life Insurance Quotes Wiz:
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Is Life Insurance?
Life insurance offers a way
to replace the loss of income that occurs when someone dies (usually
the person who produces the majority of income in a family situation).
It is a contract between you as the insured person and the company or
"carrier" that is providing the insurance. If you die while
the contract is in force, the insurance company pays a specified sum
of money free of income tax — "cash benefits" — to the person
or persons you name as beneficiaries.
life insurance program does more than just replace the loss of income
that occurs if you die. It should also provide money to cover the new
costs that arise after your death — funeral expenses, taxes,
probate costs, the need for housekeepers
and child care, and so on. And these cash benefits should provide for
your family's future needs as well, including college education for
your children and part or all of your spouse's retirement needs. In
almost all cases, your beneficiary can use the cash benefits in the
way he or she sees fit, without restriction.
types of life insurance — permanent
life insurance policies — have a cash value that you can obtain by cashing out the
policy or by borrowing against it. Though it can seem attractive, most
financial experts agree that this feature should be seen as a secondary
purpose of life insurance. Another type of insurance is term
life insurance policies are available as well. To learn more click
the respected link.
Do You Really Need Life Insurance?
there is someone who would suffer economic hardship if you died, then
the answer is yes... you need life insurance! Families with young
children have a clear need for life insurance. If both spouses work,
the loss of one income will cause the family immediate economic hardship
and make it harder for them to realize future goals, such as paying
for the children's' education. But even if one spouse works "inside
the home" and doesn't bring in a formal income, his or her death
will require the surviving spouse to hire child care, housekeepers and
other professionals to help run the household - and that can be a significant
you are married without children or single, then you may need life insurance
to protect your partner or surviving family members against the costs
associated with your death. Funeral expenses, probate and administrative
fees, outstanding debts, special obligations to charities, and federal
and state taxes are costs that all of us must consider.
And, they can add up quickly. Unless you already have sufficient financial
resources, your survivors will probably need life insurance to cover
Happens To Your Family If You Don't Have Enough Coverage?
any circumstances, the loss of a loved one is a traumatic experience.
But, if your family is also left without sufficient money to
meet basic living needs or prepare for future goals, they will have
to cope with a financial crisis at the same time. Depending upon their
current financial resources and ability to "get back on their feet"
emotionally and financially, your family might be forced to move to
a less desirable home or community, abandon education and career plans,
reorder family priorities (such as the amount of time spent with the
children) and, in general, cut back on the quality of life you have
worked hard to achieve.
Your family might even be forced
to go into debt simply to pay the expenses, like funeral costs,
taxes, and medical bills, that result from your death. A moment's
reflection will tell you that the lack of sufficient life insurance
coverage when a loved one dies can have devastating consequences for
a family...consequences that can last for years.