Life Insurance Explained

Life Insurance Explained

Life Insurance Explained

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The best way life insurance is explained is that is the one thing most people don’t like to think about and that is it only gets used when you are no longer here with your loved ones. It is also an essential financial tool that can be used in situations where loved ones are dependent on you for their financial well-being.

What is life insurance?

Life insurance is a kind of insurance that pays out your pre-determined beneficiaries, usually family members or loved ones in the event of your passing. 

The life insurance policy is in effect as long as premiums are paid on time or as long as they are deemed necessary. 

Today individuals take out life insurance policies at different stages in their lives, with different dependent needs and sometimes cancel policies when they feel there are no longer any dependents that rely on them financially.

Comprehensively, there are two life insurance plans – Term plans and venture insurance plans, otherwise called whole/variable life insurance plans. 

How does life insurance work?

Life insurance is an agreement between the life insurance organizations or company and the policyholder. The life insurance policy pays the amount of designated cash to the policyholder’s beneficiaries upon his or her passing. 

There is typically a detailed questionnaire that requests your age, your family health history, if you drink, smoke and other detailed questions to determine your risk from a policyholder standpoint. 

The next step most life insurers will request a history of your specific health and usually an examination as part of your application process.

You should read the fine print carefully, take notes and ask questions anywhere you need further explanation.

Remember to ensure that you are purchasing from a trustworthy and reputable insurance organization. Shop around for similar coverage and look at the overall costs of coverage in your analysis.

A financial advisor or insurance agent acting as your fiduciary or someone who is looking for your financial interests is also someone you could consult in the life insurance selection process.

What are the different types of life insurance?

Term Life

This is probably the most straight forward of all life insurance policy types. You simply pay a fixed amount every month over a given period of time for a predetermined payout life insurance coverage. 

When the period terminates, you can either renew the policy under new terms or simply let it expire. 

The advantage of this policy is that you can easily plan your life insurance based on your current life event needs with a fixed cost and duration. For example, if you have a newborn child and you want to at least have insurance during their first 18 years of life, you can take out a specific policy just for that. You know exactly what your monthly costs are and when the policy will expire.

Entire or Whole Life

The main difference between whole life and term life is that the individual guaranteed will be covered for his or her whole life. This is the explanation concerning why it is likewise here and there called “perpetual coverage.” 

This option is usually very costly and comes with complex terms and conditions. Also, insurance companies prefer these policies that they profit from them a lot more than simple term insurance. Take this all into consideration in your overall insurance selection process.

Why is term life insurance the best option?

Term life insurance monthly premiums are usually less and are offered in fixed durations between times of 10-30 years. Their policies are generally less complex than whole life policies as well.

Simply put, you pay a fixed monthly fee over a fixed duration and if you happen to pass away your beneficiaries, whomever you designate reap the financial benefit of the term life insurance policy.

Why is Everyday Life Insurance our #1 recommendation for term life insurance?

Having a reputable life insurance company looking out for your best interests is key. That’s where Everyday Life shines. Their Predictive Protection™ gives you the right coverage you need at the right time. It uses their unique interface of specific questions to hone in on exactly the best coverage, amount, cost and duration customized for you. That way you’re not overpaying or are left underinsured in any way. Learn more about Everyday Life and how they can provide a customized term life policy for your below.

#1 Rated For Life Insurance

Life insurance should adjust as your needs change – as your children grow up, retirement nears and savings build, your life insurance should change, too. Everyday Life is the only online life insurance provider with plans that automatically and adjusts as your needs change. Approval could is just a few minutes away. Apply for life insurance today with Everyday Life

Everyday Life Insurance Dad

Summary

Understanding life insurance and choosing the best policy has never been easier. Be sure to work with a reputable insurance company, review your policy, shop around and consult a financial advisor where needed. 

If you ask any questions directly with your potential insurer be sure to ask if they’re acting as a beneficiary looking out for your best interests.

Term life is our recommended insurance type for most people in most situations. This comes at a fixed cost, over a fixed duration with a pre-determined payout to your beneficiaries.

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Frank Makrides

Frank Makrides

Is a former financial technology industry executive, licensed realtor, real estate investor, an award-winning speaker, has been published, holds multiple patents and is passionate about all things personal finance and entrepreneurship. He is also a proud husband and father of 2 amazing children.

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