Life
Insurance

You don’t buy life insurance because you’re going to die, but because those you love are going to live.

Life insurance can be an essential part of your financial strategy by securing the future of your loved ones.

It can replace your income after you pass away or serve as an inheritance for your dependents. Selecting the ideal life insurance plan is an important part of securing your family’s livelihood. You can pick the right plan from a wide variety of options.

Few things are as priceless as the peace of mind knowing your family is looked after, so what’s the best way to get it?

You guessed it… Life Insurance.

But do we really understand its nuances and how it works?

Let’s try figuring that out together, and you’ll see for yourself why it is considered as the best.

Life Insurance: How it Works

Life insurance is undoubtedly a powerful and flexible product that covers burial costs and long-term care for orphans and widows. It involves paying monthly premiums in return for payouts following the death of the policyholder. Individuals can pick a suitable plan from two main variants: permanent insurance and term life insurance.

The latter provides cover for a fixed period while permanent life insurance provides coverage until you pass away. Term plans are more affordable than permanent policies, which generate cash value as you pay premiums. With a term policy, your insurance plan does not yield value if you outlive the contract.

You can take out life policies either as an individual or part of a group. The best part is that the policies provide a financial net for beneficiaries. Opting for a life policy ensures that your death will not be a financial burden on your family. If you sign up for a term life plan, the policy pays out large payouts on condition that you pass away within the covered period (commonly 10-, 20-, or even 30-year periods).

With the permanent life plan, the cash value of the policy grows rapidly at the early stages of the insurance plan. The value rises at a predetermined rate that remains fixed. However, the fixed rate does not apply to universal policies, which fluctuate in tandem with prevailing market rates. As such, the value takes longer to accumulate.

The cash value is usable while you are still alive. You can offset life insurance costs by making withdrawals, borrowing from the policy, or use the payments for future premiums. However, these allowances vary depending on the terms and conditions of your policy. Different types of life insurance can also permit you to discontinue the policy by trading the death benefit for cash value.

Having life insurance gives complete peace of mind by providing a tax-free lump sum of money to replace any lost income due to death. This offers complete financial protection and of course an invaluable peace of mind to those family or friends relies on them financially.

 

The money gained from having life insurance can be used to pay expenses such as the mortgage, utilities, grocery bills, children tuition and more. It’s hard to give thanks about now, however once it’s done. You can continue having the peace of mind.

Life insurance is recommended for everyone; however the type of plan depends on a few factors.

It is important to take note of this, and be really mindful when choosing so you can maximize your subscription to the following services.

Types of Life Insurance

The insurance industry offers different types of life insurance from which to choose. The ideal policy depends on your financial goals and coverage requirements.

Some of the policies available on the market include:

  • Term life insurance
  • Permanent or whole life insurance
  • Universal life insurance
  • Variable-universal life insurance
  • Joint life insurance
  • Mortgage life insurance:
  • Credit life insurance
  • Final expense insurance

Universal life insurance is a form of permanent policy that offers increased flexibility in terms of payment of monthly premiums. It shares similarities with permanent plans in that it comes with a cash value and death benefit component. Your beneficiaries are guaranteed to receive proceeds after your death but coverage is not limited to a predetermined period.

Term life plans, on the other hand, come with low monthly premiums but provide cover if you die within the covered period. The advantage of this option is that your beneficiaries will receive a large payout.

Whole life or permanent insurance plans come with several advantages in that they provide lifetime coverage, a tax-free cash benefit, and fixed monthly premiums. However, whole life plans do not come cheap since they are six to 10 times more expensive than term life policies.

With the variable-universal life insurance, your cash benefit does not reside in a savings account but in sub-accounts, which are similar to mutual funds. This option is the right choice if you want a hands-on approach to your investment. However, these policies have high management fees (life insurance cost) and poor performance compared to other life policies.

How much Life Insurance does one need?

Indemnity insurance comes with a wide variety of benefits, including closing gaps in coverage, paying a lump sum directly to the policyholder, and fixed premiums.

This type of insurance is undoubtedly a family-friendly option that provides cover for the entire family. The coverage extends to various types of ailments and procedures that result in overnight stays or outpatient visits. It also covers maternity stays by paying a predetermined amount for additional days spent in a medical facility.

You are free to use the lump sum payments for any purpose. As such, you may decide to use the funds to pay rent, deductibles, childcare, food, or other personal and medical expenses. With the hospital indemnity plan, you can save a significant amount of money on health insurance premiums.

The plans offer maximum flexibility by allowing you to use the payouts as you wish. Most policyholders opt to use the funds to cover out-of-pocket costs. The best part is that the payouts are tax-free and claims are approved without physical examinations. You can take out a plan even if you have a pre-existing health condition.

On another level, indemnity plans are portable in that you retain your policy even when you change jobs, switch to Medicare, or move to another state.

Another key advantage of taking a hospital indemnity plan is that the policy remains active and provides financial protection. As such, you minimize exposure to financial problems associated with out-of-pocket costs. Many plans offer free telemedicine visits and the bill negotiator, thus eliminating copay charges.

The policy you take out should cover necessities like medical expenses, food, and other discretionary costs. With life insurance for seniors, consider end-of-life expenses like a funeral home, casket, and burial costs. Integrating these costs into a life policy eliminates the need for loved ones to bear the financial burden associated with a funeral.

 

Your health and age are vital personal considerations when determining the right amount of life insurance you need. Signing up for a policy as a senior citizen reduces the amount of coverage you require since you are likely to have fewer or no dependents. In many cases, elderly policyholders have less or no debt commitments.

 

You should consider choosing a life insurance plan if you are a spouse, parents, homeowners, businesses…

After all the explorations and careful considerations we’ve been through we should now have a clear picture of what to expect once we get into this, right?

 

However, the last but definitely not the least question would probably be…

Is Life Insurance worth getting?

Investing in a life policy is a smart move that provides peace of mind for you and your loved ones. This type of insurance is a must-have, especially if you are the sole breadwinner in the family. Depending on the type of policy you choose, you may receive cover if you develop a terminal illness. In turn, the policy pays for unexpected costs associated with your health condition.

You can use your policy for a variety of purposes, including paying end-of-life expenses, replacing your income, paying off debt, a form of inheritance for loved ones, pay taxes, or cover children\’s education. In the end, the policy makes it easier to ensure that your children will go to college without worrying about tuition even if you pass away.

A life plan also eliminates the need for your family to bear the burden of outstanding mortgage payments after you are gone.

Imagine this happening.

A Tragedy Strikes:

You are the sole provider for your family, however, disaster strikes and you are no longer around.

Then CleverPolicy steps in, and your Life Insurance has covered your family. Your wife/husband is able to provide for the family and the coverage has relieved the financial burden

Your Family Is Being Looked After Even When You’re Gone

Your families Total Cost would be $602.00

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