Life

Life insurance: Learn how it works

Purchasing life insurance could be one the best purchases you’ll ever make. Simply put, life insurance can act as a safeguard for your financial interests and will help you family to manage when you die. It’s not an easy topic to discuss, but an important one, nonetheless. If someone is financially dependent upon you, you need to consider taking out some type of life insurance policy. There are several types of life insurance, but all of them pay cash to your family upon your death.

Proceeds from a life insurance policy can be used for many expenses such as: funeral costs, credit card debt, estate settlement, income taxes, and outstanding medical expenses as well as paying a variety of loans. Future expenses that can be paid with life insurance include college tuition and health care, to name a few.

What type of insurance is right for you?

The basic feature of any life insurance policy is the “death benefit” which is the amount of money paid to your beneficiary upon your death. This was the original purpose of having life insurance, although today’s policies offer many more options for you. While there are many types of life insurance, the two most common types are “term life insurance” and “permanent life insurance”.

Term life insurance is just what it says — it provides you with protection for a specified period of time, usually 20 years. It offers the greatest amount of coverage for lower premium costs. This is a good choice for young families or if your financial obligations to others will end at some point in the future.

Permanent life insurance provides you with lifelong protection and a variety of options to choose from including whole life, variable life, universal life, and variable universal life insurance. In general, with permanent life insurance, you have some investment options as well being able to accumulate cash value on a tax-deferred basis. Your premiums are going to be higher than with term insurance.

Working with a broker

The big question is “How much life insurance do I need?” There’s no magic bullet to answer this question because everyone’s financial circumstances are different. There are a lot of factors to take into consideration. What are your current financial obligations? What about future obligations such as retirement? What is your income and that of your spouse? How much do you currently have in savings and investments?

You really need a qualified insurance professional who can help you through this process. For over 30 years, independent insurance broker and agent, Daniel Fraisse, has been helping people determine the right amount of coverage and the type of life insurance necessary to protect the people they love. Over the years, Dan has developed good working relationships with many insurance carriers, but the bottom line is that he works for you. It makes good sense to have Dan analyze your life insurance needs and then help put together a policy that give your the best possible coverage at a cost that fits within your budget.

Call or click today and let Daniel Friasse work for you.