What Is Life Insurance? Keys To Finding The Right Policy

You might have often wondered what life insurance is. You probably know that it can help families, but you don't know how that works. For example, you may wonder: What happens if you die and you don't have any life insurance? You want to make sure that your family is taken care of financially and that they don't have any extra stress when they are grieving. The following life insurance guide will help you find the right policy for you and your family.

The Importance of Life Insurance

Life insurance might not be something that you have given a lot of thought, but it is important. There are a lot of burdens that you could leave behind with your family if you do not have good life insurance coverage. You want to have a good policy that covers funeral expenses and leaves your family with financial benefits once you are gone. 

Passing Away Without Life Insurance

If you do pass away before you have life insurance coverage, it can be a problem with your family. First, they might not be able to pay for the funeral if you pass away. It can also leave them with financial burdens if you have left any assets in their name, and they might not be able to claim them if you do not have insurance and a will. 

Disabilities and Accidents Before You Die

In addition to covering the costs of death, there are also policies that can cover other accidents. If you get in an accident that leaves you disabled and unable to work, then your insurance policy might cover some of the financial problems that arise. You will have to discuss this type of coverage with your insurance agent to ensure your policy covers accidents and other things that could leave you disabled and unable to take care of yourself. 

Options for Types of Life Insurance

You have a couple of options for life insurance: term life and permanent (or whole) life.

Term policies cover you until you reach a certain age. The premium is paid every month and is usually level. Once the term expires, the policy ends. Term policies can be used as part of an estate plan to protect your family's financial future; however, they do not build any cash value over time like permanent life insurance does.

Permanent (or whole) life insurance builds up cash value over time, so it can be used as an investment vehicle as well as for financial protection against death or disability. Some whole life policies can even be converted into term policies at no cost when their cash value reaches a certain level or if you no longer need them for financial protection purposes (although there may be surrender charges).

Contact a life insurance company to learn more.