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Life insurance can help reduce some of the financial stress that comes with losing a family member. Life insurance policy benefits can be used to help pay for final expenses after you pass away. This may include funeral or cremation costs, medical bills not covered by health insurance, estate settlement costs and other financial obligations.
What Is Life Insurance?
A life insurance policy is a contract between the policyholder and an insurance company. When premiums are paid as agreed and the policy remains in force, named beneficiaries of the policy receive a cash payout when the insured person dies.
The policy owner decides who will receive the death benefit upon the death of the insured person. Beneficiaries of life insurance don’t have to go through a probate court or pay taxes on the death benefit. So they’ll receive the payout shortly after filing a claim with the insurance company.
Beneficiaries can use the death benefit for any reason, including:
What Policy Options Exist?
Life insurance generally falls into one of two main categories:
Term life insurance policies cover the insured person for a predetermined number of years. If the insured person dies during the term of the policy, their beneficiaries receive the death benefit.
Whole-life policies provide coverage no matter when the insured person dies. In addition to the death benefit, permanent life insurance policies provide a savings component. The policy builds cash value over time, which is eventually accessible in the form of a policy loan. Whole life insurance policy owners may choose to “cash out” their policy to receive the money that’s accumulated minus fees.
When you purchase life insurance, you can decide the policy type and the death benefit amount. You may choose to put beneficiary stipulations in place or establish a trust to direct payments after you die.
Insurance Partners of KS agents are ready to assist you as you choose life insurance to support your financial goals.
Why Get Life Insurance Coverage Now?
Life insurance premiums depend on a number of factors, including your health status and age. Young and healthy people generally pay less for life insurance, no matter which type they choose. For this reason, it’s wise to purchase a life insurance policy earlier rather than later.
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Life insurance riders, like critical illness, accelerated death benefit, waiver of premium and long-term care (LTC) can provide certain financial benefits while you are alive.
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Young and healthy people may think they don’t need life insurance, but purchasing a policy right away could help lock in a lower premium.
While term life insurance is less expensive in general than whole life insurance, it doesn’t provide many of the advantages of a permanent policy.
Learn About Your Life Insurance Options
Thinking about life insurance can bring up many uncomfortable feelings, but taking time to purchase a life insurance policy now can help provide your loved ones with ongoing financial support after you are gone.
Contact Insurance Partners of KS LLC today to learn more about your life insurance options.
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