Although you’ve likely heard of life insurance, you also probably have lots of questions regarding exactly how life insurance works. There are many parts that make up a life insurance policy and understanding the benefits of life insurance can make buying life insurance much easier.
Simply put, a life insurance policy protects your family if something were to happen to you. Life insurance policies are most beneficial to people who work full time, care for their families or own a home. A life insurance plan helps your family financially in the event that you are no longer able to provide for them.
What Can Life Insurance Cover?
If something were to happen to you and you could no longer help your family, a life insurance policy can help them maintain their current standard of living. It can provide money to pay for your home, pay off debt or create a college fund. It can also pay for your final expenses so that your family is not left with the financial burden.
What Are My Choices for Life Insurance?
There are a variety of life insurance policies that have advantages and disadvantages, depending on the individual. Here’s a short description of the two most popular forms of life insurance:
Term Life Insurance: This form of life insurance is best for short-term coverage and is increasingly popular. The premium starts low and remains level for the length of the term and can be purchased in high amounts. Many people purchase term life insurance to help cover the costs of debts, such as student loans or mortgages.
Permanent Life Insurance: As the name suggests, this is a long-term form of life insurance. The premium remains constant and you choose the amount of coverage that you need. It helps to cover a family member’s financial needs as well as your final expenses.
When Should I Get Life Insurance?
Although you can sign up for life insurance at any time, you especially may want to consider getting life insurance when you get married or have a child. Shopping for life insurance while you’re young can help to secure a lower rate as well.
Buying life insurance can be beneficial at any age though. Contact your insurance agent to find the best fit for you and be sure to ask them any additional questions you may have about how does life insurance work.