Intro To Insurance: Life Insurance
By Cathy Pareto
Life insurance was initially designed to protect the income of families, particularly young families in the wealth accumulation phase, in the event of the head of household's death. Today, life insurance is used for many reasons, including wealth preservation and estate tax planning. (For background reading, see The History Of Insurance In America.)
Life insurance provides you with the opportunity to protect yourself and your family from personal risk exposures like repayment of debts after death, providing for a surviving spouse and children, fulfilling other economic goals (such as putting your kids through college), leaving a charitable legacy, paying for funeral expenses, etc. Life insurance protection is also important if you are a business owner or a key person in someone else's business, where your death (or your partner's death) might wreak financial havoc.
Life insurance is a great financial planning tool, but should never be thought of as a savings vehicle. In general, there are often far better places to hold and grow your money as you get older.
Who Needs It?
Not everybody needs life insurance. If you are single and have no dependents, it may not be worth the expense. If, however, you have anyone who financially depends on you (even partially), life insurance may be appropriate for you. When considering life insurance, the questions to ask yourself are this:
- Do I need life insurance?
- How much do I need?
- How long will I need it?
- What type of policy makes sense for me? (this will be answered in our next section)
Intro To Insurance: Types Of Life Insurance
A life or disability insurance policy that an insurance company ...
The number of individuals participating in an insurance plan ...
A health insurance benefit provision that places limits on benefits ...
An educational tool that shows a prospective or new insurance ...
A type of managed-care health insurance plan that provides different ...
Additional whole life insurance that a policyholder purchases ...
Capitalize on the cash value of your whole life insurance policy and learn the details of how to borrow money from your life ...
Learn how the grace period works on a flexible spending account so you can take full advantage of your annual pretax contributions.
Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ...
Learn the instances in which you are required to pay taxes on a life insurance policy loan, so you can avoid making a costly ...