Why should I buy life insurance?
If you died tomorrow, how would your family and/or business survive financially? If people or a business depend on your income, life insurance will help them stay afloat.
Are there people that don’t really need to purchase life insurance?
Because purchasing a life insurance policy means paying into it, there are certain groups of people who might not need to spend money on a policy. Examples are those who have fully independent, adult children who are supporting themselves financially, and people who have a sufficient amount of assets, both liquid and illiquid, for their family to live off of in the event of their death.
What is term life insurance?
In the most basic of explanations, term life insurance is often compared to a safety net – you, as the owner of the policy, pay a fixed premium over a certain period of time. At the end of this period, the coverage either expires or you may choose to renew it. If you die during your policy’s active term, your insurance company pays out the pre-agreed upon amount of money that you have been paying into to your benefactor.
What is whole life insurance?
Whole life insurance is similar to term life insurance in that the policyholder pays a set premium and there is a set payoff, but there is no policy termination date. The policyholder pays into the policy for the rest of their life or can cash it in and collect a lump sum.
What is universal life insurance?
If you buy a universal life insurance policy, a portion of the premium that you pay will be ciphered into investments, such as bonds, mortgages, and money market funds. These investments eventually pay for the set payout in the event of your death. If your investments aren’t successful, your insurance company still guarantees you a minimum return.