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Life Insurance

Life Insurance

When a life insurance policyholder passes away, the family is helped with the many expenses incurred related to the cost of a funeral or with leftover medical bills. Additional coverage helps the dependents with payouts equaling the deceased policyholder’s former income.

With this kind of insurance the policyholder pays his or her premiums and is then afforded a death benefit, which is money paid out to the designated beneficiary at the time of the policyholder’s death. The insurance comes in the form of two kinds of policy types. Term policies are meant to last a certain number of years. Once this number of years has passed, the policy goes into expiration and the death benefit is no longer available should the policyholder die.

Whole life policies are open-ended with no date of expiration. They will pay a death benefit as long as the policy remains active and paid up. Unlike term life insurance, whole policies can build up in cash value. Universal life insurance is like a hybrid of whole life and term life insurance. It utilizes its cash value to offset premium costs.

With a whole life policy the policyholder can have access to the cash while still living. It is not to different in function than a savings or retirement account. The death benefit is also guaranteed regardless of when the policyholder dies. The big plus for term life insurance is its very affordable costs. A term policy can also leave a larger benefit than a whole life policy might.






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