Final Expense Life Insurance


What is Life Insurance?

Life insurance is basically a contract between you and insurance provider company where you pay regular premiums, and in return, the insurer pays a sum of money in case of specific incidents like upon the death of insurance policyholder. Not only death but other incidents like critical illness or terminal illness are also covered by the life insurance policy.

This contract mentions all coverage and limitations. Life insurance is the thing which is overlooked most of the time but trust me, it’s an important financial part of your life. Because it provides benefits for your family in long terms.

Typically life insurance is purchased so you that your family members would be able to live a balanced life and sustain their bills and education expenses for your kids because no one wants to leave their family unprepared.

Do I need Life Insurance?

If you’re married, have kids or if someone is dependent upon you in any way. Then the answer is “YES” because it covers both your family and your business.

But not everyone needs life insurance, it depends on many factors. The first question that needs to be answered when you want to buy life insurance is “Who you want to protect after you pass away?

After answering this question, you can choose one of the following life insurance plans.

Common Types of Life Insurance

1. Term Life Insurance

Term life insurance is for a specified period of time like 5 – 30 years. It’s a flexible type of life insurance, ideal and affordable for an individual who wishes to buy life insurance for a specified period of time like a person can buy term life insurance until his children reach adulthood. If the policyholder didn’t die within the insurance time period, the policy expires without any payout.

2. Whole Life Insurance

Whole life insurance, also known as permanent life insurance, is another simplest type of life insurance policy. It covers the whole life where you pay annual premiums. It pays benefits to the beneficiary after the death of the policyholder.

Whole life insurance premiums may increase as the policyholder ages and it can become hard to afford when the person lives after 80, but these benefits and premiums can be fixed in most cases. The younger you buy whole life insurance, the cheaper premium payments will be, because the amount, you agree to pay at a younger age, will be the same in 40 years.

3. Universal Life Insurance

Universal life insurance is a flexible type of Whole Life Insurance, it’s flexible because you can change the amount that you pay each year or even you can skip certain premium payments and death benefits are also adjustable. A part of your premium payment goes to your cash account and this cash account earns interest for you and cash value can be withdrawn or you can also take tax-free loans against your cash value.

But the universal life insurance policy is more expensive than a term life insurance plan.

4. Variable Life Insurance

Variable life insurance is another type of life insurance that is similar to the universal life insurance plan. The main difference between variable and universal life insurance is that with variable life insurance, the rate of interest will not be specific in your cash-value account. You can invest a portion of your premium into other investment plans like mutual funds or bonds.

With life variable life insurance, the potential for earning cash value is higher than other life insurance plans. But there is a risk of a drop in cash value earning when you invest in risky investment plans and your investments decline because these investments are subject to the market’s ups and downs. However, you’re still guaranteed minimum death benefits as long as you keep paying the minimum required premium regularly.

5. Mortgage Life Insurance

Mortgage life insurance, also known as Mortgage Protection Insurance, is a type of life insurance but here beneficiary is not your family or children, the mortgage lender is your beneficiary. This policy makes sure that your mortgage lender is paid and your family can stay in the home even after the death of the breadwinner.

In mortgage life insurance, the payout amount decreases over time and this is the biggest drawback of this life insurance plan.

6. Final Expense Life Insurance

Final expense life insurance, also known as Burial Insurance, is another type of life insurance that covers the expenses and bills (medical bills and funeral expenditures) that your family faces after your death. Unfortunately, this barebone insurance plan can cost thousands of dollars.

Disclaimer: This article provides only information about different types of Life Insurance plans. We don’t recommend you to buy any specific Life Insurance Plan, you should consult your insurance provider for further information.

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