There are hundreds of different types of insurance in the world today. Ask any insurance agent, and they will tell you that life insurance is the most overlooked one of them all. What makes this so odd, life insurance is the most important one of them all.
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Life insurance itself is hundreds of years old. Its design is simple. An insured (policyholder) pays an insurer (the insurance company) a dollar amount called premium. In return, an insurer will promise to pay funds (a death benefit) to any person of your choosing (a beneficiary), as long as their name is on your policy before you pass away. As long as premiums are still being paid, the insurance company is obligated to pay a beneficiary a death benefit.
Who Needs Life Insurance?
Everyone, no matter their age can benefit from a life insurance policy. However, the people that mostly buy it have families that they need to make sure are financially stable, even if they were to die.
Who All Can You Put A Life Insurance Policy on?
When insurance first hit the market hundreds of years ago, there were little to no rules. So, criminals would take life insurance policies out on, let’s say their neighbor, with, or without the neighbor even knowing. The criminal would then kill the neighbor, and collect the life insurance check. Needless to say, insurance carriers figured this out real fast and adopted a key rule called insurable interest (some related to you, even a spouse). Today, it is not possible to take out a life insurance policy on someone who you do not have an insurable interest on.
People who you can take out a life insurance on are as follows:
- A spouse
- A child
- A parent
- A grandchild
- A sibling
- An aunt or uncle
When Is the Best Time To Purchase Life Insurance?
The best time to purchase life insurance is when you find yourself responsible for the well-being of other family members, or a spouse. If you are the breadwinner, and you love your family, the worst thing you could do to them is dying and leaving them a ton of bills. So many, that your spouse and child can no longer afford the way of life they were accustomed to when you were alive. Now, they face losing the home. The children face not being able to go to the college of their choice. The living spouse might have to work 2 and three jobs to survive, and this could end up being something you never envisioned your family having to go through upon your death.
Where Can I Find Life Insurance Quotes?
Life insurance quotes are pretty easy to get these days. Just log on to your favorite search engine, and type in life insurance. Your search should bring back more options than you will know what to do with.
What Are The Main Types Of Life Insurance?
Life insurance has two main types; whole life and term life insurance. Each still pays a death benefit, however, how long they last are vastly different.
- Whole Life – Whole life is just how it sounds. As long as you keep paying your premiums, the policy will keep covering you until your last day.
- Term Life – This policy only provides life insurance for a very specific amount of time. The time frames are usually in amounts of 10, 20, and 30-year policies.
Get at least three life insurance quotes before deciding on a policy. Do research on the companies in question. Term life policies are always cheaper than whole life policies. Whole life policies gain a cash value, and a loan can be borrowed from them at certain points.