Understanding Two Types Of Life Insurance
Life isn't supposed to be easy. We all must go through hard things at certain points of our lives that test our patience and our will power.
Illness, Family deaths, divorce, or depression are only some of the things that are thrown into our lives without a moment's notice. They come in uninvited and change everything, either positively or negatively in the long run.
Sometimes these tragedies can be seen before they happened, and the impact on the affected person can be mitigated. But other problems are almost impossible to foresee.
Take, for example, your own death. It might be a morose subject to think about, but it is a reality that needs to cross your mind at some point.
There are many questions that need to be answered about your own death that, if left unanswered, can turn into a great burden for the family and friends that you leave behind.
How will your family pay for the funeral? Will your children still be able to be supported financially by your spouse, who is now a single parent and has to figure out everything on their own?
These are only a few of the questions that need to race through your mind. You cannot avoid them.
But these questions don't need to be scary to think about. If you are prepared and plan ahead for your family's future, you will have a clear mind and will not worry about anything.
One of the best ways to create a clear mind about death is to obtain life insurance. Life insurance is a contract between a customer and an insurance company where the insurer agrees to pay a lump sum of money after the customer's death so that they will be financially covered.
In return, the customer (before their death) agrees to pay certain increments of money at regular intervals until their death. By paying small amounts one by one over their lifetime, the customer can be assured that their family will be secure when they are not there to help.
There are two main types of life insurance that one needs to understand before they pick a certain type of plan that's best for them. These two types are called temporary term and permanent life insurance.
Temporary term insurance is basically how it sounds. The insurance company provides life insurance for the customer for a certain amount of years in return for a regular payment by the customer.
The customer pays the company for however long he is on a term contract with them. If the insured person dies before the contract is up, the person who is the "beneficiary" to the insurance company will receive the money. If the person dies after the contract is up, they receive no money.
You can see that this is not an optimal type of insurance because of the uncertainty of death. The next type, permanent life, is a more secure type and would better fit a wider variety of people.
Permanent life is also exactly how it sounds. The plan remains in force until the customer dies and the beneficiary receives their money.
The only way that the pay-out will not be given is if the insured person fails to pay the premium at any given time. Although this type of plan is often more secure, it is harder to get out of considering that it is a more extensive security plan.
Only if the insured person gets frauded by the company or by any other party can the person cancel their policy. The expense also increases over time because the company adds a cash value over time.
Because the expense increases over time, plans that people have can get very expensive and burdensome, especially for the elderly who have been on their plans for many years. Nevertheless, this type of plan can be very beneficial because of the promised security that it brings.
We urge you to strongly consider looking at different types of plans and to really look at purchasing a good policy. You might not see the benefits of it now, but once the unexpected happens, those that are left behind will be thankful.
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