Life insurance, like real estate and the legal and medical professions, has its own language that can make it appear to be more complicated than it is. If you are unfamiliar with life insurance and some of its terminology, this should help.
There are two basic types of life insurance: term and permanent. Term insurance covers the insured for a specific period of time, typically ten or twenty years. Permanent, sometimes referred to as “whole life,” provides coverage for as long as premiums (payments) are kept up-to-date.
As noted above, premiums are simply another name for the payments made for a life insurance policy.
The beneficiary is the person designated to receive the proceeds of a life insurance policy upon the death of the insured. A pet cannot serve as a beneficiary.
Life insurance companies are generally categorized as stock or mutual companies. These refer to the type of ownership of the company. In simple terms, stock companies are owned by their stockholders, while mutual insurance companies are owned by their policyholders.
There are two basic types of insurance agents: captive and independent. Captive agents are those who only represent the products of a single company. Independent insurance agents represent the insurance products of a variety of companies.
Factors that impact your life insurance costs include your gender, age, health, employment, lifestyle, and more. Generally speaking, life insurance is at its most affordable rates when you are young and healthy.
How much life insurance you should have depends on your situation. Some individuals just carry enough to cover final expenses while others wish to provide for the payment of bills, pay off an existing mortgage, pay for a continued lifestyle, or for children’s education.
Your independent life insurance agent can serve as a resource for your life insurance questions. If you want life insurance explained in plain English, reach out. We will be glad to answer questions and even provide a no-obligation price quote. Discover the affordability and peace of mind that can come with life insurance. We look forward to assisting you.