Are you considering getting a life insurance policy? There is a lot to know about life insurance and the many different types of policies you might wish to invest in. Life insurance can have a number of different benefits and is often sought after for specific reasons. For those who are looking into life insurance, Signet Insurance Group will share some of the basics to help you understand and better determine which life insurance policy is right for you.
Life Insurance Considerations
When you are considering applying for life insurance, you are essentially making a contract between you and the insurance company. Life insurance provides you with coverage which is based on your timely payment of premiums. Life insurance helps to provide benefits to your beneficiary upon your death. When you pass away, your beneficiary, which in most cases is your spouse, can file the claim with your insurance company. They will need to submit proof of death such as a death certificate, then the insurance agent will work with the family or the beneficiary. They will make sure they complete the right paperwork. Once the life insurance company has all of the needed documents, then the beneficiary will receive the death benefit payout. If a child is named the beneficiary, the custodian of the policy would have to file a claim and they can help manage the money from the policy. If you were never named a beneficiary, the courts will appoint someone if you die before listing a beneficiary. This is basically how a life insurance policy works. However, there is much more to know when it comes to the different types of life insurance policies.
Types of Life Insurance; Term or Whole
There are a few different types of life insurance policies. The two most common are temporary and permanent insurance. A temporary insurance is also called a term insurance and is a policy that is issued for a certain period of time and more often 5 years through 30 years. A permanent insurance covers the entire life or up to a certain age of a person, which is usually 100 years of age. Here is a basic break down of major differences of the two life insurances.
Temporary Insurance (Term Insurance)
• Pays a death benefit to the beneficiary if you die during the term while the policy is active or until 95 years of age.
• Death benefits can have the right to convert to a permanent policy without proof of insurability.
• Temporary life insurance has no value at the end of the term.
Permanent Insurance (Whole Life)
• Pays the death benefits to your beneficiary regardless as to when you die when the policy is in force.
• Pay out can include both death benefits and the saving feature.
• A permanent insurance policy can build cash or loan value that you can barrow against, invest or withdraw.
These are the two basic types of life insurance policies. However, there are others you can also consider as there is a lot that determines the limit or value of the policy.
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When you want to set up a life insurance policy to help secure your loved ones, contact Signet Insurance Group today to help find the best policy for your needs.
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