What is Life Insurance?
Most of us are familiar with the term “insurance”. We pay premiums to an insurance company; whether it be for our vehicles, our homes, or our health, and in return these companies “insure” us that if anything extreme were to happen, (your house burns down, you get in a car accident, you cut yourself while cooking and need some serious stitches) you would be covered for a certain amount of money so you wouldn’t have to drain your life savings trying to pay for the bills. Life insurance is similar it is just an insurance policy which is put on your life.
All of us have a 100% chance of dying. Eventually, everyone will pass on. It may not be tomorrow, but ultimately the time will come. Life insurance is a policy in which you pay premiums into and in return the insurance provider will pay a benefit to whomever you select (your beneficiaries) when you pass on.
People have life insurance policies for many different reasons. Some want to insure their families will not be left with any debt they may have incurred over the years, they want to make sure their funeral arrangements will be paid for, and that their kids will be able to go to college and get an education. Life insurance policies can also be used for investment purposes, and for insuring your family will be taken care of, and maintain their current lifestyle when your wage is no longer available.
There are two major categories of life insurance: whole life and term.
More on whole life insurance information >
January 24th, 2008 at 10:32 am
[…] we discussed in another article, insurance is a way to manage risk. Life insurance can cover the risk of leaving your loved ones […]