What You Need to Know About Life Insurance

Insurance can be a bewildering topic for many consumers, and life insurance is challenging to understand. While we know we need insurance for our homes, vehicles, and health, life insurance often gets put off until it's too late. Unfortunately, skipping out on life insurance could rob your loved ones of the ability to move on with their lives - not from an emotional standpoint but a financial one.

What is life insurance?

Life insurance is a policy that pays the person or people you designate (called “beneficiaries”) if you die while the policy is in force. You can choose the amount that the policy will pay, called the “death benefit.”

The higher the “death benefit,” the higher your monthly or yearly life insurance coverage (premiums) payments. Also, other factors determine how much you pay for coverage, including your gender, health, lifestyle, age, and medical history.

Some life insurance policies also offer a “rider,” or add-on coverage, for various situations not covered under your core life insurance policy. For example, an “accelerated death benefit” rider might entitle you to receive 10% of the death benefit upon diagnosis of a terminal illness or condition listed in the policy agreement.

What are the benefits of life insurance?

Like many, you probably have people who financially depend on you or whose lifestyle would be dramatically altered without your income.?Life insurance?lets you provide your loved ones with a financial “safety net,” which allows them to continue their same lifestyle, pay for your funeral and burial expenses, and handle medical and other costs you may leave behind.

Life insurance can also serve as an inheritance. If you do not have significant wealth or assets to pass along, life insurance can help ensure your loved ones are taken care of at your passing.

Also, you can borrow against some types of life insurance, creating a “safety net” for yourself in case a financial emergency arises.

What types of life insurance are there?

Most life insurance policies fall into two categories: “term Life” and “whole life.”

Term life?insurance provides a death benefit if you die before the policy expires. An experienced insurance professional can help you decide how long you want the policy to cover you (10, 20, and 30-year policies are common). You’ll also choose the policy's amount to pay to your loved ones if you die during the policy term.

• Level term?policies are the most common - the death benefit stays the same throughout the policy’s lifespan.
• Decreasing term?policies feature a death benefit that decreases over time.

Whole life?insurance is permanent, as long as the policy premiums are paid. There are three primary types of whole life coverage:

• Traditional whole life?features consistent premiums and benefits throughout the policy’s lifespan.
• Universal life?is a more flexible policy that features an interest-earning savings account paid out upon your death.
• Variable life?similarly features a savings account, but with the account’s value tied to major investment indexes.

How do I choose the right life insurance policy for me?

Consider life insurance as you would any other significant financial decision.

• What are your current needs and goals?
• How much would your loved ones need to maintain their lifestyles if you passed away?
• How much can you afford in insurance premiums?

Typically, whole life premiums are considerably higher than term life premiums. Also, you may have to pass a health evaluation, which may include past medical records.

Working with a reputable agent or broker can help demystify life insurance. Our trained professionals at PS&G Financial Partners can help you find the policy that best fits your needs and budget.

Contact us?today with any questions you may have on this topic or others related to your insurance needs.