Life insurance. You’re told that as an adult, it’s something you should get.
But how does life insurance work? It can seem confusing, which is why many adults often don’t purchase it. This is a huge mistake.
So let’s learn all about life insurance, how it works, and why you should get it. You’ll be glad you did.
How Does Life Insurance Work?
In most cases involving insurance, something happens and you receive compensation for your loss. In the case of life insurance, when something happens, it happens to you.
Life insurance is purchased not to benefit you, but rather, to benefit your loved ones after your death.
Here are two types of life insurance to choose from.
Term life insurance only covers you for a specific amount of time. Say you choose a 30-year policy. At the end of those 30 years, if you’re still alive, the policy simply ends.
No money is paid out unless you pass within the time frame covered by the policy. This type of life insurance is extremely affordable, due to the length of the policy.
Whole life, as the name suggests, covers you for the entirety of your life. This means it’s also more expensive.
However, with this type of insurance, it is possible to build cash value. What this means is that if you ever decide you no longer want to hold the policy, you can turn it in for money.
Is it Difficult to Get Life Insurance?
Many people assume life insurance is just for wealthy people. That simply isn’t true. In fact, the people who benefit the most from life insurance are the ones who have the most to lose.
Life insurance is also affordable. There are those whose life insurance rates may be higher than others due to the following conditions:
- Risky lifestyle
- Elderly individuals
- People with certain pre-existing conditions
However, that does not mean that individuals within those groups should expect that their rates will be too high to be affordable. Most insurance companies can work within your budget to find you the right policy.
Who Should Get Life Insurance?
Really, everyone could benefit in some way from getting life insurance. If you’re single with no dependents, then it’s not as vital to have comprehensive life insurance coverage as the following people:
- Parents and Guardians
- Business Owners
What Steps Should My Family Take if I Pass On?
How does life insurance work?
While you’re alive and healthy, take the time to share with your beneficiaries the steps to take should something happen to you. While it might seem like a scary and difficult topic, think of how much harder it would be for them while they’re grieving and in shock.
So here’s what you tell your beneficiaries:
1. Contact the life insurance company to begin the process
2. A Claim typically takes 30 days to process
3. Any life insurance claims that go directly to the beneficiary cannot legally be used to pay back the deceased debts
Life insurance doesn’t have to be scary. It’s a way to protect your loved ones and give you peace of mind.
Don’t wait, contact us today to find the right policy to protect you and your family.