Life Insurance is a contract between an Insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.
Life Insurance is a great way to protect your family financially in the unfortunate event of your death. The best life insurance companies can help you secure enough coverage to replace your income, settle debts, or cover expenses your family will likely face such as paying for your children’s education or caring for aging parents.
The great thing is that life insurance proceeds are exempt from any creditors and the law protects insurance proceeds from the claims of your creditors after death. Below we give you 5 ways on how you to pick the best life insurance policy?
Setting Your Goals
The best life insurance policy is one that you can afford. Set a goal that works for you.
Calculate Coverage Needed
Its always good to do a needs analysis before calculating your coverage and speak with a licensed Insurance agent or financial advisor.
Compare Insurance Policies
There are two types of policies, permanent and term. Permanent life insurance policies offer a death benefit and a cash value. The death benefit is money that’s paid to your beneficiaries when you pass away. The cash value in a permanent life insurance policy is the portion of your policy that earns interest and may be available for you to withdraw or borrow against in case of an emergency. Term Life insurance is a life insurance policy that provides coverage at a fixed rate of payments for a limited period of time. (Ex: 10, 20 or 30 year terms.)
Name a Beneficiary
Naming a beneficiary is 100% your choice. Typically, it’s a spouse and or children, but there are instances where someone has named an organization as the beneficiary of their proceeds after death.
Talk with an Advisor
Always speak with a Licensed Insurance agent or financial advisor before purchasing Life Insurance.
The biggest mistake you can make with life insurance is not having a policy. Remember, once you pass away you leave your family and loved ones with your debt including funeral costs. The best way to learn more about life insurance is to seek a licensed Insurance agent or Financial planner.