subject: The Importance of Life Insurance [print this page] The Importance of Life Insurance
Many of us know that having life is insurance is important, but it may not always be clear to people how life insurance works or why exactly it's so significant to begin with. An agreement between the insurer and policy holder, life insurance pays an agreed upon sum of money to someone whom the insurer names as beneficiary; in case some sort of wrongful death or terminal illness should befall the insurer. In simple terms, life insurance helps take care of your family or loved ones in case something unforeseeable happens to you.
Life insurance companies are extremely lucrative; while providing the "peace of mind" that you hear about in the insurance commercials, they make substantial profit by using science to graph and calculate mortality rates and then reflect those numbers in the price given to the insurer. Even though there may be a certain rate for one company, another may have used their experience to gather a completely different set of data, enabling them to sometimes offer a substantially lower or higher price than differing companies.
It is imperative to remember that if you miss even a single payment, your insurance may be revokedand if you die at this time, then it might not pay out at all. Knowing and understanding your policy completely is the best way to ensure that you don't lapse on you policy, or fail to understand something completelyboth of which could easily lead to non-payment in the event of death.
Remember, life insurance isn't something worth skimping on, it counts to pay more for things you may not need than to leave them out. In this world, you can never be too sure about something, and it pays to cover all your bases. Whole life insurance is usually far too expensive because of its "investing" aspect. I would advise anybody to stay away from this there are many better ways to invest your money than to put it in a policy that's going to take more than seventy percent of it as overhead and commission. You'd literally make more money by just taking the extra amount of money whole life would cost you out of your check each week and depositing it in a savings account.
Though with the many pitfalls that accompany life insurance, the industry does help a lot of grieving people each year with expenses they might not otherwise be able to pay for.
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