What Is Life Insurance?
A life insurance policy is a type of personal insurance that can provide financial security for your beneficiaries after you pass away. Finding the right policy can take time and effort, and the agents at I&E Insurance Agency are here to help. Contact us today to learn why our coverage solutions are right for you.
What Is Life Insurance?
Life insurance is a legally binding contract between you and your insurer. It helps protect your loved ones from financial hardship after your passing by providing a death benefit to your designated beneficiaries.
These payments are commonly used for the following:
Income replacement to provide financial support to people who depend on your income (e.g., young children)
Final expenses so your loved ones don’t have to pay out of pocket for burial expenses, funeral costs and other estate administration costs
Inheritance creation to pass on wealth and assets to your chosen beneficiaries
Estate taxes so your beneficiaries do not have to liquidate their personal assets or take a smaller inheritance to pay the taxes associated with the transfer of your estate
Does Life Insurance Expire?
The coverage duration of your policy will depend on the type of life insurance you have. Two types of life insurance are commonly available: term life insurance and permanent life insurance.
Term life insurance provides coverage for a set amount of time, such as 10, 15 or 30 years. At the end of that term, it will no longer provide a death benefit to your beneficiaries.
Permanent life insurance provides coverage for the rest of your life as long as you continue to make monthly premium payments. Additionally, a permanent life insurance policy typically allows you to build up cash value, which can be withdrawn, used to pay future premiums or borrowed against, per the policy’s terms. Examples of permanent life insurance include whole life insurance, universal life insurance and variable life insurance.
Permanent life insurance generally has a higher premium than term life insurance, but you may determine that the features of permanent life insurance (e.g., the cash value component) outweigh its added costs.
Additionally, some permanent life insurance (e.g., whole life insurance) may have a level premium, meaning you pay a set rate for the duration of the policy. When you’re older, this could mean your whole life insurance policy would have lower premiums than if you were to purchase a new term life insurance policy at that time. Our agents can provide more information on the costs and benefits of each option.
How Many Life Insurance Policies Can I Have?
There is no legal limit to the number of life insurance policies you can have. Although many people have sufficient protection from a single life insurance policy, obtaining multiple life insurance policies can provide additional financial protection. It may be beneficial to secure more life insurance after certain events that bring new financial obligations (e.g., buying a house, having a child, starting a new business).
Not sure how much life insurance you need? The insurance agents at I&E Insurance Agency are here to answer your questions. Contact us today for a free quote.
How Do I Buy Life Insurance?
At I&E Insurance Agency, we make it our mission to get you the protection you deserve. Call an agent today to learn more about our coverage solutions.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.