Life insurance can often be confusing and a low priority for a majority of families. Little do they know that life insurance is important in ensuring the security of a family’s future. Since it is so important, we’ve identified the top five questions about life insurance and answered them to give you better insight.
1.) Do I need life insurance?
To provide protection for your family or dependents in the event that you are no longer able and living to provide for them, life insurance is essential. If you have debt when you die, your immediate family is responsible for the money that you owe. If you don’t have life insurance, they are at risk of having to pay back that money.
2.) What if I don’t want the policy anymore or want to change it?
If you are not satisfied with your policy, you will have what is called a “free-look” period. This can be anywhere from the first 10-30 days from the start of your policy where you can cancel and receive a refund of premium.
3.) What is underwriting?
This process is used by insurance companies to determine the cost of providing coverage. It includes getting information about your age, gender, health habits, family health history and whether or not you have dangerous hobbies.
4.) How much life insurance do I need?
Figuring out how much life insurance a person needs depends on the various needs of your family in the event of the death of a family member. Providing a fund can help relieve financial stress in various ways such as:
- Pay for children’s education.
- Provide income for the spouse.
- Pay off debts or bills.
5.) What are the main types of life insurance available?
There are two types of life insurance: term insurance and permanent insurance. Term life insurance provides protection for a certain period of time such as five or ten years. Death benefits are only paid out if the insured dies during the time period of the policy. Permanent life insurance can provide death benefit protection for your lifetime. Permanent insurance also includes different types of policies such as whole life, universal life and variable universal life.
It’s important to be educated about what policies exist and what best fits your needs. Hopefully these top five questions about life insurance have helped answer some of your concerns about life insurance and influenced you to be more confident about it. Check out these five tips for first time life insurance buyers.
Since insurance is oftentimes overwhelmingly confusing, we want to shed light on this industry by answering YOUR questions about life insurance. So if you have any questions or concerns, comment below and your question may be the topic of our next article!
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