What Is Your Life Worth: Life Insurance Explained


Death is something that, no matter the age, always comes too soon. This is inevitable. Nobody knows when and where their life will end. As a result of this inevitability, it is NEVER too soon to prepare for the worst.


Many people fear the expense of life insurance, but it is worth the expense. Many people consider life insurance to be a ridiculous sum of money while, in reality, it is much more affordable than given credit. There are different types of life insurance policies of which people should be aware. They are broken down into different categories below.


Terminology:

Premium: Minimum payment required to keep a life insurance policy active.


Death Benefit: The amount payable upon the death of a person whose life is insured.


Policy Term: Duration that a life insurance policy is active.


Level Premium: Non-fluctuating premium payments.


Cash Value: The amount to which a policy-owner is entitled if the policy is surrendered before maturity.


  1. Term Life Insurance - (Temporary) - Cheapest Form - Recommended


Level-Term

  • Level Death Benefit and Level Premium During Policy Term

Annual Renewable Term

  • Death Benefit Remains Level and Premium Increases with New Attained Age

  • No Need Proof of Insurability When Renewing Coverage

Decreasing Term

  • Level Premium with Decreasing Death Benefit over Policy Term

Increasing Term

  • Level Premium with Increasing Death Benefit over Policy Term



Whole Life Insurance - (Permanent) - Until Death or Age 100 - Cash Value (Savings Element)


Characteristics

  • Level Premium for Life

  • Death Benefit is Guaranteed and Remains Level

  • Cash Value

  • Living Benefits that Can Be Borrowed Against


Types of Whole Life Insurance


Ordinary Life

  • Basic Policy

  • Level Premium Until Age 100 or Death

  • Level Death Benefit

Limited Payment

  • Premiums Paid Up Early Before Age 100.

  • Usually 20-Pay Life (20 Years to Pay Up)

  • Also, Life Paid-Up at 65.

  • Coverage Lasts Until Age 100 or Death

Single Premium

  • One Lump Sum Payment

  • Level Death Benefit



Interest-Sensitive Life Insurance - No Death Benefit Guaranteed - Investing - Avoid



  1. Indexed Life

  2. Interest-Sensitive Whole Life

  3. Universal Life

  • Can Make Partial Surrender/Cash Withdrawal

  • Option A

  • Level Death Benefit

  • Option B

  • Increasing Death Benefit

  1. Variable Life Insurance

  2. Variable Universal Life Insurance

  • Both Variable Life Insurance Policies

  • Fixed Premium and Minimal Death Benefit

  • No Cash value and Actual Death Benefit is Guaranteed



Life insurance is a great idea if you have children who are younger than 25 years of age. During this time period of your children's life, they are just entering the workforce and may be in financial trouble if something were to happen to you. If you passed away, the death benefit of your policy would be very helpful to cover living expenses until they can start to build a tower of money for themselves. If your child depends on your income, a life insurance policy is a must.


The opposite is true. If you have a child who is 26 or older, put money in savings. Your child should be exposed to the workforce and is working to better handle finances. If you put money into savings, you should be able to put money away than what your policy would cover. AKA, your child should not DEPEND on the death benefit to survive. I personally own a Term Life Policy.


The money involved in a life insurance policy is aleatory (very unequal). You pay very little in comparison to what your primary or contingent beneficiary, or what your estate, will receive if something happens to you. Life insurance policies are not a one-size-fits-all, but there is certainly a policy for everyone!


In order to get a custom affordable quote, visit the Zander Insurance website. Are you ready to get started?

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