Life Insurance

Life insurance is coverage for family’s benefit in the event of your death. Should something happen to you, your life policy will pay out a cash benefit to whomever you designate as your beneficiary.

Anyone who wishes to provide financial protection for loved ones may apply for a life policy. The type of coverage and rates you’ll receive depend on the insurer, what you need and what you can afford.

You generally must complete an application for life coverage. The process varies by company, and you might have to answer health questions or meet age requirements. If you’re accepted, you’ll receive a premium rate based on the insurer’s assessment of your risk level and the amount and coverage type you requested. Common reasons for life coverage denial include serious medical conditions, like diabetes, drug use, and activities the insurer views as too high a risk.

There are four major life insurance types: term life, whole life, guarantee universal life and index universal life. A term life policy provides a set death benefit for a specific period of time, such as 30 years, but doesn’t build any cash value. A whole life policy has a death benefit with no set period of time for coverage, and it builds cash value you can tap into while you’re alive.

Guarantee universal life has a death benefit plus the option to build up a cash value, and coverage can be lifetime or set for a shorter period. Index universal life has a death benefit for a set period of time, like term life, but also builds up a cash value that is determined by percentage changes in major financial indices, such as Dow Jones.

Life coverage can provide you peace of mind while you’re living and help your loved ones survive financially in the event of your death. The policy proceeds can help your family pay expenses like your funeral bill and medical costs, and will also help ease the pitch of the sudden income loss in the household.