People who want to leave something behind for their loved ones often look for life insurance plans. These plans can offer quite some benefits. However, some people don’t understand whether life insurance is a good idea. That is why we at Generations Insurance are here to help!
What Is Life Insurance
This is contact between an individual and the insurance company. This contract generally consists of a single term that states as long as the individual pays the premium amount, the insurance company will provide a lump sum upon the individual’s death.
Why Consider Life Insurance
Life insurance, as we mentioned before, supports the people dependent on the owner of the insurance. Here are some examples of why someone might consider life insurance.
- Parents with young children often look for life insurance. This is because they can leave something behind for their children upon their death.
- Parents with adult children who have special needs
- To support the family. Often people get life insurance so that once they pass away, they can provide something to their family to pay for rent, etc.
- Families that can’t afford burial or funeral expenses
- A business with a key employee
How Does Life Insurance Work
Life insurance policies have two essential components. One is a death benefit, and the other is premium. As there are two types of insurance policies, term and whole. Term insurance plans consist of two components, whereas whole life insurance consists of three.
The death benefit is the amount of money the insurance company guarantees to pay the policyholder’s beneficiaries. For instance, the money would go to the children of a parent who passed away.
Premium is the money an individual pays to lock in his or her insurance coverage. This premium could either be paid monthly or yearly. Keep in mind paying more than once can result in extra costs. Cash value is the third component often found in Whole Life insurance plans. This serves two purposes; it is a savings account that the owner can use during the insurance program. The owner can also use it to pay for further premiums.
Contact Experts At Generations Insurance
Our experts at Generations Insurance are here to help you when you need it. If you have any concerns or questions regarding insurance plans, give us a call!