Life Insurance



What is life insurance and why do you need it?

Death is not a comfortable topic of discussion for most of us. Often, it’s easy to dismiss it as a far possibility while others simply try to avoid it altogether.

Unfortunately, life does not always work the way we want it. Life’s unforeseen circumstances can put us in a situation that we wish we should’ve thought about ahead.

Loss is one of them.

In your permanent absence, what do you think will happen to the people close to your heart? Those who depend on your for support and survival?

Life insurance is the answer to your worries. However, it’s more than just a safeguard for the “what ifs;” it’s also a great financial tool.

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What is life insurance?

A life insurance is a form of financial guarantee that promises to provide payments to the people you designate as beneficiaries upon your passing in exchange for periodic payments.

It’s a necessary financial tool that secures the financial stability of a policyholder’s family or dependents in the event of loss.

A life insurance can be used to pay off expensive debts such as your home loans, and even fund your children’s college education. It can also be used to cover tax payments or even supplement retirement savings for a widowed spouse.

Who needs life insurance?

Getting a life insurance policy is a recommended course of action for people who have individuals depending on them financially. These can be a spouse, children, or a parent.

What are the types of life insurance available?

a.) Term life insurance – this type pays a specific lump sum to the beneficiaries for an agreed-upon period of time. The insurance stops once you stop paying your premiums. These policies however will only pay the policyholders their due benefits if they pass away during the period covered by the policy.

b.) Permanent life insurance – unlike a term life insurance, permanent life insurance policies don’t expire and provide lifelong protection. They also build cash value, which means the policy will grow in value every year.

How do insurance companies calculate quotes?

Factors such as age, health risks, gender, as well your family’s health history can all weigh in on your life expectancy which is the primary concern of life insurance companies. The higher the risks are to your life expectancy, the more expensive your policy would be.

This is also the reason why the younger you are at the time of applying for a policy, the more you are going to save on your premiums. It is generally assumed that the young carry less health risks than older applicants.

How much life insurance do I need?

It’s hard to obtain an accurate number when it comes to the right amount of coverage you need. However, there are some important elements that you need to weigh in to at least ensure that by the time your beneficiaries would need it, they would be adequately covered.

First, calculate everything you provide for your family (e.g. health insurance benefits, household expenses, home maintenance, mortgage payments, etc.) then subtract your personal expenses. The resulting figure will give you a better idea about how much insurance you’re going to need.

Being in a difficult financial standing can add stress to an already overwhelming grief at the loss of a loved one. Getting the right policy may not help ease the feeling of bereavement, but it certainly does help the people close to your heart go on and get their lives back together.

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