subject: A Few Reasons Why Life Insurance Is So Very Important To Us [print this page] Life insurance exists as a means to protect one's family if the unthinkable happens and you are no longer with them. The purchase of a policy ensures that your loved ones will have financial security even if the one who is responsible for the primary income is lost. Thus, in theory at least, potential income will be replaced.
Another purpose that a policy of this kind is used for is the transfer of assets, either personal or business. For example a settlement, or a portion of one, can be set up to replace the value of certain assets that are difficult to divide. Transfers of properties can be made easier as well. Funds can be set aside for the purpose of paying off mortgages, buying out partners, or other liens on the property may be taken care of.
The picking of a policy and the one who will carry it may be difficult as it is often hard to understand what your own unique needs will be. So then the first step has to be the figuring out of what it is you wish to accomplish. Next the right type of policy should be selected in order to accomplish these goals. Then it will be time to shop around for a policy that comes with a premium that will not upset the budget too much.
To begin assessing what is needed in the policy you acquire certain important questions need to be asked. What will it take to secure your family's financial future? What standard of living do you wish to maintain them in? How will your final expenses be handled and by whom? What about any outstanding debts? How will they be paid off?
Life insurance policies only come in two major types. Those are what is known as term life and permanent life. Term life is a policy that only lasts for a set number of years before the option to renew it is exercised. It is the least expensive of the two as it offers nothing but death protection with no side funds or cash values. Permanent life on the other hand does offer side benefits, side funds, and the like. These funds often grow in value over time.
The cost of the policy is often based on the life expectancy of the insured, the duration of the policy, and its face value. Thus the obtaining of a policy with low rates is largely dependent on the past and current health of the one who insures himself. Therefore as a consequence the insurer may want to know much about your medical history including any previous conditions you may have.
For those who have a need to protect those they love and their futures life insurance may be just what they need to consider. This is especially true if there is a situation that requires certain funds to get it resolved.
by: Harriett Nunnery
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