With life insurance, you can give your family certain comforts like staying in their home, finishing school, and providing the financial security to help secure their future. It can replace income, create inheritances, support charities, and more.
Simply make regular premium payments, and the insurer pays a benefit to your beneficiaries. Some policies also offer living benefits.
Here are some terms you should be familiar with:
The people who receive money when the covered person dies. Beneficiaries are often spouses, children or parents, but also can be whomever you choose (e.g. friends, charities, or others).
The total amount of money the beneficiaries receive when the covered person dies. You choose a cash value when you buy the policy. Permanent life insurance can also pay additional money if the cash account has grown, and you selected certain options for your policy.
The payments you make to the insurance company. For term life policies, these cover the cost of your insurance and administrative costs. With a permanent policy, you’ll also be able to allocate these payments into an account that has cash value.
These are optional additions you can make to your life insurance to provide specific coverages and tailor your policy to your needs, such as providing benefits if you become chronically ill or disabled, need additional death benefits, cash value or estate planning assistance.
Affordable protection for a set period, with an option to convert to a permanent policy.
Flexible premium payments and the potential to build cash value while earning a minimum interest rate.
Fixed payments and the potential to build cash value while earning a minimum interest rate.
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