The Importance Of Life Insurance

According to Investopedia, an online business dictionary, life insurance is, “A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the processed and is thereby safeguarded from the financial impact of the death of the insured.” In other words, the goal of life insurance is to provide financial security for one’s family after one death. There are two categories life insurance policies fall under – temporary or permanent. Temporary policies provide coverage for a specified term while permanent policies are aimed to increase capital for the owner’s entire life. One example of a temporary policy is term life insurance. Term life insurance is for a specified period of time for 5, 10, 15, 20, 25, 30or 35 years at an affordable cost. This insurance is designed for people who cannot afford to purchase permanent life insurance or those who

To even qualify for a policy, one must have a health examination, but do not have to have a medical exam. Yet, premiums will be higher if they do not. Contrary to term life, whole life insurance provides a death benefit and a cash vale accumulation that builds over the course of a person’s policy. However, it takes ten to fifteen years to accumulate a sizeable cash value, and it is based on how much the return on investment is worth. A portion of the cash value can be withdrawn or borrowed during the life of the policy. In comparison to term life premiums, whole life premiums are more expensive, especially in the earlier years of one’s life. Nonetheless, whole life spans over the life of the policy owner and thereby can save money. Term life insurance increases over time, but whole life insurance premiums will never increase as long as the premiums are paid in time. Moreover, the coverage amount will not decrease as one gets older and is guaranteed for a