Important things to consider when buying life insurance

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Important things to consider when buying life insurance

What is life insurance and who should have it? Life insurance pays out a sum of money to chosen recipients, called beneficiaries, after the person covered with the insurance has passed away. This provides the beneficiaries with financial protection.

People use life insurance to solve a basic problem what happens to your loved ones if you die, especially if that takes place sooner than you had hoped?

Here we discuss a few common questions about life insurance:

What to know when buying life insurance

Life insurance comes in two basic varieties:

The first type is called term life, which covers you for set amounts of time, usually for terms of 10-30 years. The protection expires when the period is up, meaning you may outlive your coverage and would have to qualify for and purchase another policy to get coverage beyond your term.

The second type is permanent life insurance, of which whole life insurance is the most common. Whole life covers you for your entire life (as long as your payments to the insurance company remain current), while simultaneously building up a guaranteed cash value.

Common Questions about Life Insurance

Where do I buy life insurance?

The most common way to buy life insurance is through a financial professional who is affiliated with a reputable insurance company.

Look for a company with good ratings and a long history of stability.

How much life insurance should I have?

Various insurance companies will calculate this in different ways. Factors could include: How many dependents you have, how much you expect to earn, what lifestyle you hope your loved ones can experience, and more.

Who is eligible to buy life insurance?

Basically, anyone is eligible unless you get turned down for certain reasons, some of which might be serious health issues, a dangerous occupation or hobbies.

Is the life insurance I receive through my job enough?

Lots of businesses include company-paid life insurance as part of their employee benefits. While this is a worthwhile perk, look closely at the amount of money your loved ones would receive if you pass away