Life Insurance

Life insurance is a contract between an individual (the policyholder) and an insurance company, where the insurer agrees to pay a death benefit to the policyholder’s beneficiaries in exchange for premium payments.

Types of Life Insurance

 Term Life Insurance: Provides coverage for a specified period (e.g., 10, 20, or 30 years).

 Whole Life Insurance: Provides lifetime coverage and a cash value component.

 Universal Life Insurance: A flexible premium policy with a savings component.

 Variable Life Insurance: A policy that allows you to invest your cash value in various investments.

Benefits of Life Insurance

 Death Benefit: Provides financial support to your loved ones in the event of your passing.

 Tax Benefits: Premiums may be tax deductible, and death benefits are typically taxfree.

 Cash Value: Some policies accumulate a cash value over time, which can be borrowed against or used to pay premiums.

 Living Benefits: Some policies offer living benefits, such as accelerated death benefits or long   term care benefits.

How Life Insurance Works

1. Application: You apply for life insurance coverage, providing personal and medical information.
2. Underwriting: The insurance company assesses your risk and determines your premium.
3. Policy Issuance: If approved, the insurance company issues your policy, and you begin paying premiums.
4. Premiums: You pay premiums to maintain coverage.
5. Death Benefit: If you pass away, your beneficiaries receive the death benefit.

Factors to Consider

 Coverage Amount: Determine how much coverage you need based on your income, expenses, and financial goals.

 Policy Term: Choose a policy term that aligns with your needs, such as until your children are financially independent.

 Premium Costs: Consider the cost of premiums and how they fit into your budget.

 Riders: Additional features, such as accidental death benefit or waiver of premium, can enhance your policy.

Tips for Buying Life Insurance

 Assess Your Needs: Determine your coverage needs based on your financial situation and goals.

 Compare Policies: Research and compare policies from different providers to find the best fit.

 Read Policy Documents: Carefully review policy documents and ask questions before purchasing.

 Seek Professional Advice: Consider consulting with a licensed insurance agent or financial advisor.