Many people ask us on a regular basis, “Should I purchase life insurance?” We are a big fan of it and here’s why…..
What is Life Insurance
A life insurance policy is a contract between you and an insurance company. In exchange for a set of premium payments, the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries you choose upon the insured’s death.
Typically, life insurance is chosen based on the needs and goals of the owner. Term life insurance generally provides protection for a set period of time, while permanent insurance, such as whole and universal life, provides lifetime coverage. Appropriate life insurance coverage may provide you with a feeling of confidence since you know that those you care about should be financially protected after you die.
The two basic types of life insurance are term life and permanent life.
Term Life Insurance
Term Life insurance policies provide life insurance protection for a specific period of time (subject to the claims-paying ability of the insurer). If you die during the coverage period, your beneficiary receives the policy death benefit. If you live to the end of the term, the policy simply terminates, unless it automatically renews for a new period. Term policies are available for periods of 1 to 30 years or more and may, in some cases, be renewed until you reach age 95. Premium payments may be increasing, as with annually renewable 1-year (period) term, or level (equal) for up to 30-year term periods.
Permanent insurance policies provide protection for your entire life, provided you pay the premium to keep the policy in force (subject to the claims-paying ability and financial strength of the insurer). Premium payments are greater than necessary to provide the life insurance benefit in the early years of the policy so that a reserve can be accumulated to make up the shortfall in premiums necessary to provide the insurance in the later years. Should the policyowner discontinue the policy, this reserve, known as the cash value, is returned to the policyowner, subject to applicable surrender or early withdrawal charges.
With over 20 years’ experience providing Life Insurance solutions for our clients, Hershenberg Stone-Walsh Insurance Services understands the complexities of life insurance and represents many of the nation’s top life insurance companies. Our process is simple, we start by listening and understanding our client’s needs. Through this process, we can help our clients find the right life insurance company, the right type of policy and the amount of coverage needed.
To learn more about life insurance and how we can help you, CLICK HERE!