One type of insurance one shouldn’t do without is life insurance plan. While some take full advantage of it, others take it for granted. That’s probably because nobody expects death to hit them or anyone they love. However, this is all the more reason why you need life insurance plan the most. Death can leave loved ones with financial burdens they do not expect.
This article contains a summary of what life insurance plan is and the critical times when you need it. Read on to find more!
What’s Life Insurance?
Life insurance is a way of lifting the burden on beneficiaries in the event of death. It leaves a non-taxable payment for the said beneficiary. It comes in two kinds; term life and whole life insurance.
Term life insurance only covers for a “term” between 1-30 years. It has an option for purchasing premium life insurance.
Whole life insurance offers long-term or lifetime coverage up to 100 years. It is a cash value policy that allows you to tap into it during your lifetime.
There are factors to consider when choosing between term life and whole life insurance. These are:
- Family and work situation
- Life goals
- What is to be covered
Critical Times When Life Insurance Come into Play
Most life insurance plans, like the whole life insurance, can be used for debt repayment. Sometimes when policyholders die, they leave benefits as well as debt behind for their beneficiaries to clear. However, arrangements can be made with insurers to repay those debts with insurance benefits.
Securing a Better Financial Future for Your Beneficiaries
For policyholders with dependents, the financial future of the dependent(s) can be secured using the insurance policy. When the said dependent is named the policy’s beneficiary, they receive insurance benefits at the policyholder’s demise.
With life insurance, there should be no worry about the issue of inheritance. Whole life (cash value) insurance is best for this. With it, the beneficiaries collect the insurance benefits that have been appreciated over time. So it is more like an investment.
A Secure Alternative Source of Retirement Income
Life insurance retirement plans can act as a supplement to your income after retirement. It is permanent insurance with a cash value component. It comes in two stages, the accumulation stage and the withdrawing stage.
It comes with three payment options.
- Systematic withdrawal
- Lump-sum payment.
The primary reason for life insurance is to cover death expenses. Shockingly, funeral expenses can be up to several thousands of dollars, from hiring a funeral director to catering for other costs. With that much strain on finances, insurance benefits will go a long way to ease the burden.
Life insurance has many scenarios it caters for, from debt payment to tuition, funeral expenses, or as an inheritance. All of which are non-taxable.
Regardless of what the insurance is meant for, Randy Jones Insurance, Pleasanton, California, can be your preferred go-to insurer. Contact our team of insurance experts today to get a free quote! We offer some of the best insurance coverage plans available, tailored to suit your needs.