One of the most overlooked financial tools is life insurance. Even the most basic of policies can provide the much needed support to your family if you were to pass away. This is why it’s so important to look for the best life insurance policies for the premiums you can manage.
Here are some important questions to consider when comparing life insurance policies.
What is Term Life Insurance?
Term life insurance is a policy designed to cover a certain period of time. Generally the term is for 1, 5, 10, 15, or 20 years. If a policy holder were to survive beyond the policy’s term, the policy expires and there is no benefit given to the family.
What is Permanent or Whole Life Insurance?
As long as you pay the premiums, permanent, or whole life insurance, will provide a benefit from the day you begin the premium to the day you die. The policy builds a cash value and allows you to access the funds (under certain stipulations) for retirement income, college tuition expense, down payment for a home, and other emergency needs.
Can I Have Multiple Insurance Policies?
Yes, you certainly can have different kinds of insurance policies as long as you’re able to sustain the premiums. Before you purchase every insurance policy presented to you, be sure you consult with an independent financial planner to assess whether or not you should have multiple insurance policies.
How Do You Collect on Life Insurance?
If you die and have a life insurance policy, your family should locate the life insurance documents and inform the insurance provider right away. They will need to provide a certified copy of the death certificate and may need to complete other paperwork. They should receive the funds tax free to cover any expenses needed.
If you have other questions, include them in the comments and we’ll address them as well.